How robust is the relationship between economic freedom and economic growth?

Sturm, J.E.; Haan, de Jakob

doi:10.1080/00036840152022179

Cited by 23 publications

(24 citation statements)

References 16 publications

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“…For instance, outliers can tilt the (original) regression line and have small regression residuals. As a consequence, outliers might not be discovered in residual plots [25]. Furthermore, studentized and jackknifed residuals, Cooks distances and other diagnostics based on Hat matrix elements, for instance, are susceptible to the so called masking effect [23].…”

Section: Outliers and Estimation Methodologymentioning

confidence: 99%

“…Such 'vertical' outlier is characterized by an unusual observation in the dependent variable. The impact of vertical outliers on the LS estimation of regression coefficients is usually small and mainly affects the regression intercept [25]. If unusual observations occur in the set of independent variables, these outliers are called leverage points.…”

Section: Outliers and Estimation Methodologymentioning

confidence: 99%

“…An observation is identified as an outlier if the absolute standardized robust residual ( r i /ˆ ) exceeds the cutoff value of 2.5, with r i and ˆ denoting the (robust) LTS residuals and scale estimates, respectively. This cutoff-value choice is motivated by a (roughly) 99% tolerance interval for Gaussian distributed standardized residuals [25]. With X representing the matrix of independent variables and Y the vector of the dependent variable, coefficient estimates of RLS regression are defined as follows:…”

Section: Outliers and Estimation Methodologymentioning

confidence: 99%

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The Application of Robust Regression to a Production Function Comparison~!2008-08-21~!2008-11-10~!2008-11-28~!

Finger¹,

Hediger²

2008

TOASJ

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Abstract:The adequate representation of crop response functions is crucial for agronomic as well as agricultural economic modeling and analysis. So far, the evaluation of such functions focused on the comparison of different functional forms. In this article, the perspective is expanded also by considering different regression methods. This is motivated by the fact that exceptional crop yield observations (outliers) can cause misleading results if least squares regression is applied. In order to address this problem we also apply robust regression techniques that are not affected by such outliers. We evaluate the quadratic, the square root and the Mitscherlich-Baule function using the example of Swiss corn (Zea mays L.) yields. It shows that the use of robust regression narrows the range of optimal input levels across different functional forms and reduces potential costs of misspecification compared to least squares estimation. Thus, differences between functional forms are reduced by applying robust regression.

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Section: Outliers and Estimation Methodologymentioning

confidence: 99%

Section: Outliers and Estimation Methodologymentioning

confidence: 99%

Section: Outliers and Estimation Methodologymentioning

confidence: 99%

See 1 more Smart Citation

The Application of Robust Regression to a Production Function Comparison~!2008-08-21~!2008-11-10~!2008-11-28~!

Finger¹,

Hediger²

2008

TOASJ

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“…This is due to the emergence of indexes 1 ranking countries according to a scale running from the least free to the freest. The reason why more attention is paid to economic freedom is that various studies applying continually improving databases and constantly developing econometric techniques including two-stage regressions, extreme bound analysis, Granger-causality, etc., have shown that economic freedom raises long-run income or growth (Easton and Walker 1997, De Haan and Sturm 2000, Sturm and De Haan 2001, Gwartney, Holcombe and Lawson 2004. 2 But beyond the simple fact that economic freedom or the change in economic freedom positively affects growth, several details regarding this effect remained undiscovered.…”

Section: Introductionmentioning

confidence: 99%

Economic Freedom and the Process of Economic Growth: An Empirical Analysis Based on a New Measure

Kapás

Czeglédi

2010

competitio

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IntroductionSince Adam Smith who explicitly raised the importance of system of natural liberty (in modern parlance economic freedom), the issue of economic freedom has been a subject of little interest among economists, except for Hayek (1960); but during the past decade the concept of economic freedom has attracted more attention. This is due to the emergence of indexes 1 ranking countries according to a scale running from the least free to the freest. The reason why more attention is paid to economic freedom is that various studies applying continually improving databases and constantly developing econometric techniques including two-stage regressions, extreme bound analysis, Granger-causality, (Smith 1776, Book Four, Chapter IX). See http://www. adamsmith.org/smith/won-b4-c9.htm. Accessed May 15, 2009 Judit Kapás is a professor and head of Department of Economics, Faculty of Economics and

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“…Their results suggest that policymakers concerned with employment should seriously consider the degree to which their own labor market policies and those of the national government may be limiting economic growth and development in their respective states. ( private property and private markets operating with minimal government interference-have greater rates of economic growth than countries with lower levels of economic freedom (Cole, 2003;Sturm and De Haan, 2001;Powell, 2003;Gwartney, 2009). 2 Differences in economic growth (as measured by income and employment) also exist across subnational jurisdictions (e.g., states, provinces).…”

Section: Economic Freedom and Employment Growth In Us Statesmentioning

confidence: 99%