Online from: 1974
Subject Area: Economics
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|Title:||Growth regressions and data revisions in Penn World Tables|
|Author(s):||Paul Atherton, (Institute of Education, University of London, London, UK), Simon Appleton, (School of Economics, University of Nottingham, Nottingham, UK), Michael Bleaney, (School of Economics, University of Nottingham, Nottingham, UK)|
|Citation:||Paul Atherton, Simon Appleton, Michael Bleaney, (2011) "Growth regressions and data revisions in Penn World Tables", Journal of Economic Studies, Vol. 38 Iss: 3, pp.301 - 312|
|Keywords:||Data revisions, Economic growth, Education, Growth, Model selection|
|Article type:||Research paper|
|DOI:||10.1108/01443581111152418 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
|Acknowledgements:||JEL classification – O4|
Purpose – Penn World Tables (PWT) data on output measured at international prices are the data most frequently used in cross-country growth regressions. These data are subject to revision, and the amendments can be substantial for a minority of countries, although negligible for most. The purpose of this paper is to investigate the effect of data revisions on research results using the data.
Design/methodology/approach – Using Hanushek and Kimko's analysis of the relationship between growth and schooling quality and Sala-i-Martin's tests of model selection, the authors investigate how much the results of cross-country growth regressions vary if the most recent vintage (6.2) of PWT data is used, rather than the previous vintage (6.1).
Findings – The variation is substantial enough to imply significant differences in research results using different vintages of the PWT data.
Practical implications – The results reinforce the case for examining the sensitivity of growth regressions to outliers, which may be subject to subsequent data revision that might substantially affect the conclusions.
Originality/value – Previous research has identified significant revisions between successive vintages of PWT growth data, but has implied that this is not likely to affect the results of cross-country growth regressions based on long-run averages rather than on annual data. The findings suggest that this is not necessarily the case.
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