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Quantile Regression in Lower Bound Estimation

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Author Info
Maria Letizia Giorgetti
Abstract

In this paper, I illustrate the additional information that can be prodivided in estimating the lower bound (Sutton 1991, 1998) by using quantile regression. Quantile regression allows us to invesigate the influence of outliers. Previous lower bound have been performed using the simplex method. In this paper, the lower bound estimates are obtained using both methods for sectors belonging to a 'control group' and sectors belonging to an 'experimental group' forItalian manufacturing sectors in 1995. The data employed are drawn from the ISTAT (National Institute of Statistics, Italy) dataset. The results suggest that Sutton's predictions are robust.

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Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Economics of Industry Papers with number 29.

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Date of creation: Sep 2001
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Handle: RePEc:cep:stieip:29

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Related research
Keywords: Lower bound; quantile regression; simplex.;

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  1. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, vol. 50(1), pages 43-61, January. [Downloadable!] (restricted)
  2. William Gould, 1993. "Quantile regression with bootstrapped standard errors," Stata Technical Bulletin, StataCorp LP, vol. 2(9). [Downloadable!]
  3. Robinson, William T & Chiang, Jeongwen, 1996. "Are Sutton's Predictions Robust?: Empirical Insights into Advertising, R&D, and Concentration," Journal of Industrial Economics, Blackwell Publishing, vol. 44(4), pages 389-408, December. [Downloadable!] (restricted)
  4. Buzzacchi, Luigi & Valletti, Tommaso, 2002. "Firm Size Distribution: Testing the 'Independent Submarkets Model' in the Italian Motor Insurance Industry," CEPR Discussion Papers 3444, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January. [Downloadable!] (restricted)
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  1. John Sutton, 2001. "Rich Trades, Scarce Capabilities: Industrial Development Revisited," STICERD - Economics of Industry Papers 28, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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