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Measurement Error in Education and Growth Regressions

  • Miguel Portela
  • Rob Alessie
  • Coen Teulings

The use of the perpetual inventory method for the construction of education data per country leads to systematic measurement error. This paper analyzes its effect on growth regressions. We suggest a methodology for correcting this error. The standard attenuation bias suggests that using these corrected data would lead to a higher coefficient. Our regressions reveal the opposite. We discuss why this is the case. Copyright © The editors of the "Scandinavian Journal of Economics" 2010 .

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9442.2010.01613.x
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Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.

Volume (Year): 112 (2010)
Issue (Month): 3 (09)
Pages: 618-639

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Handle: RePEc:bla:scandj:v:112:y:2010:i:3:p:618-639
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