Robustness Procedures in Economic Growth Regression Models

Dennis Mapa () and Kristine Joy S. Briones

MPRA Paper from University Library of Munich, Germany

Abstract: A central question for empirical economics, particularly economic growth, is which explanatory variables to include and exclude in the regressions. This paper aims to identify variables strongly correlated with provincial income growth in the Philippines by applying robustness procedures in determining which variables are strongly correlated with income growth. The extreme bound analysis (EBA) and Bayesian Averaging of Classical Estimates (BACE) were applied to fifteen determinants of income growth from a data set consisting of 74 Philippine provinces for the period 1985 to 2003 to test which among the explanatory variables are strongly correlated to growth. The tests show that among the fifteen variables, five variables stand out as being robust. The log of initial income, the ARMM indicator, the expenditure GINI and its square and the proportion of young dependents are all considered as strongly correlated to growth.

Keywords: Robust; Extreme Bound Analysis (EBA); Bayesian Averaging of Classical Estimates (BACE) (search for similar items in EconPapers)
JEL-codes: C01 C11 O15 O18 R11 (search for similar items in EconPapers)
Date: 2007-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in The Philippine Review of Economics 2.XLIV(2007): pp. 71-84

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Journal Article: Robustness procedures in economic growth regression models (2007)
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