 The Effect of Uncertainty on UK Investment Authorisation: Pooled Estimators vs. Heterogeneous Estimators1Ciaran Driver, Katsushi Imai, Paul Temple and Giovanni Urga No B3-4, 10th International Conference on Panel Data, Berlin, July 5-6, 2002 from International Conferences on Panel Data Abstract: This paper compares pooled models of capital investment with non-pooled models using the UK's Confederation of British Industry's (CBI) Industrial Trends Survey for the U.K., particularly focusing on the effect of uncertainty on investment. The uncertainty measure is based on the cross sectional dispersion of expectations. The panel data estimation shows that uncertainty has negative effects, which are non negligible in terms of magnitude, on investment. However, if we look at the estimation results at the industry level, we find a great diversity in elasticity and t-statistics, providing valuable information not available from the pooled model. Finally, we compare forecast performances based on the above models. It is confirmed that pooled estimators are generally better than non-pooled estimators in terms of forecast performance, but the difference between the two is not very large. Keywords: Investment; Uncertainty; Panel Data Estimation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpd:pd2002:b3-4 Access Statistics for this paper More papers in 10th International Conference on Panel Data, Berlin, July 5-6, 2002 from International Conferences on Panel Data |
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