IDEAS home Printed from https://ideas.repec.org/a/mes/postke/v31y2008i2p345-356.html
   My bibliography  Save this article

What is spurious correlation? a reply to Díaz and Osuna

Author

Listed:
  • Andrew Kliman

Abstract

Studies by the author showed that strong cross-sectional correlations between industry-level values and prices are spurious. Díaz and Osuna (2005-6) challenged this finding, arguing that the correlation results are fatally indeterminate, and that the author's procedure for eliminating spurious correlation destroys the value-price correlation because of its differential effect on the variables' standard deviations. Replying to these claims, this note argues that the charge of indeterminacy stems from Díaz and Osuna's misunderstanding of the concept of spurious correlation, and that the author's procedure causes the value-price correlation to vanish because the correlation is spurious.

Suggested Citation

  • Andrew Kliman, 2008. "What is spurious correlation? a reply to Díaz and Osuna," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 31(2), pages 345-356, December.
  • Handle: RePEc:mes:postke:v:31:y:2008:i:2:p:345-356
    as

    Download full text from publisher

    File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=J205884U81525151
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andrea Vaona, 2014. "A panel data approach to price–value correlations," Empirical Economics, Springer, vol. 47(1), pages 21-34, August.
    2. Vaona, Andrea, 2015. "Price–price deviations are highly persistent," Structural Change and Economic Dynamics, Elsevier, vol. 33(C), pages 86-95.
    3. García-Belmonte, Lizeth & Ventosa-Santaulària, Daniel, 2011. "Spurious regression and lurking variables," Statistics & Probability Letters, Elsevier, vol. 81(12), pages 2004-2010.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:postke:v:31:y:2008:i:2:p:345-356. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MPKE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.