Robustness Procedures in Economic Growth Regression Models
AbstractA central question for empirical economics, particularly economic growth, is which explanatory variables to include and exclude in the regressions. This paper aims to identify variables strongly correlated with provincial income growth in the Philippines by applying robustness procedures in determining which variables are strongly correlated with income growth. The extreme bound analysis (EBA) and Bayesian Averaging of Classical Estimates (BACE) were applied to fifteen determinants of income growth from a data set consisting of 74 Philippine provinces for the period 1985 to 2003 to test which among the explanatory variables are strongly correlated to growth. The tests show that among the fifteen variables, five variables stand out as being robust. The log of initial income, the ARMM indicator, the expenditure GINI and its square and the proportion of young dependents are all considered as strongly correlated to growth.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 21460.
Date of creation: Dec 2007
Date of revision:
Publication status: Published in The Philippine Review of Economics 2.XLIV(2007): pp. 71-84
Robust; Extreme Bound Analysis (EBA); Bayesian Averaging of Classical Estimates (BACE);
Other versions of this item:
- Dennis S. Mapa & Kristine Joy S. Briones, 2007. "Robustness procedures in economic growth regression models," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 44(2), pages 71-84, December.
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
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