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A note on the use of quantile regression in beta convergence analysis

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  • Laurini, Márcio P.

Abstract

We discuss how to interpret conflicting results obtained by the use of quantile regression methods in growth regression tests of β-convergence hypothesis and the results obtained by nonparametric methods. We show that the assumption of linearity may cause the non-rejection of the β-convergence hypothesis by quantile regression. We also show that using a nonparametric form of quantile regression, we can reject the hypothesis of β-convergence and confirm the results of divergence and formation of convergence clubs. We illustrate the discussion by using the conflicting results on convergence found in the dataset of per-capita income of Brazilian municipalities between 1970 and 1996.
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  • Laurini, Márcio P., 2007. "A note on the use of quantile regression in beta convergence analysis," Insper Working Papers wpe_95, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    • Handle: RePEc:ibm:ibmecp:wpe_95
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    3. Túlio Cravo & Guilherme Resende, 2013. "Economic growth in Brazil: a spatial filtering approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(2), pages 555-575, April.
    4. Julio Cesar Araujo da Silva Junior, 2017. "An S-Shaped Crude Oil Price Return-Implied Volatility Relation: Parametric and Nonparametric Estimations," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(12), pages 54-70, December.
    5. Marta Simões & João Sousa Andrade & Adelaide Duarte, 2012. "Convergence and Growth: Portugal in the EU 1986-2010," GEMF Working Papers 2012-13, GEMF, Faculty of Economics, University of Coimbra.
    6. João Sousa Andrade & Adelaide Duarte & Marta Simões, 2014. "A Quantile Regression Analysis of Growth and Convergence in the EU: Potential Implications for Portugal," Notas Económicas, Faculty of Economics, University of Coimbra, issue 39, pages 48-72, June.

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    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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