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Growth regressions and data revisions in Penn World Tables

Author

Listed:
  • Paul Atherton
  • Simon Appleton
  • Michael Bleaney

Abstract

Purpose - Penn World Tables (PWT) data on output measured at international prices are the data most frequently used in cross-country growth regressions. These data are subject to revision, and the amendments can be substantial for a minority of countries, although negligible for most. The purpose of this paper is to investigate the effect of data revisions on research results using the data. Design/methodology/approach - Using Hanushek and Kimko's analysis of the relationship between growth and schooling quality and Sala-i-Martin's tests of model selection, the authors investigate how much the results of cross-country growth regressions vary if the most recent vintage (6.2) of PWT data is used, rather than the previous vintage (6.1). Findings - The variation is substantial enough to imply significant differences in research results using different vintages of the PWT data. Practical implications - The results reinforce the case for examining the sensitivity of growth regressions to outliers, which may be subject to subsequent data revision that might substantially affect the conclusions. Originality/value - Previous research has identified significant revisions between successive vintages of PWT growth data, but has implied that this is not likely to affect the results of cross-country growth regressions based on long-run averages rather than on annual data. The findings suggest that this is not necessarily the case.

Suggested Citation

  • Paul Atherton & Simon Appleton & Michael Bleaney, 2011. "Growth regressions and data revisions in Penn World Tables," Journal of Economic Studies, Emerald Group Publishing, vol. 38(3), pages 301-312, August.
  • Handle: RePEc:eme:jespps:v:38:y:2011:i:3:p:301-312
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    References listed on IDEAS

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    Cited by:

    1. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
    2. Jetter, Michael & Parmeter, Christopher F., 2015. "Trade openness and bigger governments: The role of country size revisited," European Journal of Political Economy, Elsevier, vol. 37(C), pages 49-63.

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