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Les liaisons fallacieuses : quasi-colinéarité et "suppresseur classique", aide au développement et croissance

Author

Listed:
  • Jean-Bernard Chatelain

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Kirsten Ralf

    (Ecole Supérieure du Commerce Extérieur - ESCE - International business school)

Abstract

This paper shows that a multiple regression with two highly correlated explanatory variables, both of them with a near zero correlation with the dependent variable may correspond to a spurious regression or to a homeostatic model, with estimates highly sensible to outliers. The regression method does not allow how to decide which one of the two models is relevant. Statistical significance of the (very high) parameters is easily obtained, as shown doing Monte Carlo simulations. An example is provided by the Burnside and Dollar [2000] article on aid, policies and growth.

Suggested Citation

  • Jean-Bernard Chatelain & Kirsten Ralf, 2012. "Les liaisons fallacieuses : quasi-colinéarité et "suppresseur classique", aide au développement et croissance," PSE-Ecole d'économie de Paris (Postprint) halshs-00686765, HAL.
    • Handle: RePEc:hal:pseptp:halshs-00686765
    DOI: 10.3917/reco.633.0557
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    References listed on IDEAS

    as
    1. Hristos Doucouliagos & Martin Paldam, 2010. "Conditional aid effectiveness: A meta-study," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(4), pages 391-410.
    2. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    3. Chatelain, Jean-Bernard & Ralf, Kirsten, 2014. "Spurious regressions and near-multicollinearity, with an application to aid, policies and growth," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 39(A), pages 85-96.
    4. Hoover,Kevin D., 2001. "Causality in Macroeconomics," Cambridge Books, Cambridge University Press, number 9780521452175.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

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    3. Kodila-Tedika, Oasis, 2012. "Entrepreneurship and property right: de Soto'r right [Entrepreneuriat et droit de propriété : de Soto a raison]," MPRA Paper 43464, University Library of Munich, Germany.

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    More about this item

    Keywords

    Spurious regression; near-multicollinearity; classical suppressor; parameter inflation factor (PIF); aid; economic growth; suppresseur classique; Régression fallacieuse; quasi-colinéarité; suppresseur classique; facteur d'inflation d'un paramètre; aide au développement; croissance économique;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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