Economic Information Versus Quality Variation in Cross-Country Data

30 Pages Posted: 16 Feb 2001

See all articles by John W. Dawson

John W. Dawson

Appalachian State University - Department of Economics

Joseph P. DeJuan

University of Waterloo - Department of Economics

John J. Seater

Economics Dept., Boston College

E. Frank Stephenson

Berry College - Campbell School of Business

Date Written: December 2000

Abstract

Data quality in the Penn World Tables varies systematically across countries that have different growth rates and at different stages of economic development, thus introducing measurement error correlated with variables of economic interest. We explore the seriousness of this problem with three examples from the literature, showing that the problem appears to be minor in growth convergence regressions but serious in estimating the effect of growth volatility on the average growth rate and in a cross-country test of the Permanent Income Hypothesis. The results suggest, at the very least, a need for performing appropriate sensitivity tests before drawing conclusions from analyses based on available cross-country data.

Keywords: Data quality, cross-country comparisons

JEL Classification: E21, 047, O57

Suggested Citation

Dawson, John W. and DeJuan, Joseph P. and Seater, John J. and Stephenson, E. Frank, Economic Information Versus Quality Variation in Cross-Country Data (December 2000). Available at SSRN: https://ssrn.com/abstract=260101 or http://dx.doi.org/10.2139/ssrn.260101

John W. Dawson

Appalachian State University - Department of Economics ( email )

Boone, NC 28608
United States

Joseph P. DeJuan

University of Waterloo - Department of Economics ( email )

Waterloo, Ontario N2L 3G1
Canada

John J. Seater (Contact Author)

Economics Dept., Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

E. Frank Stephenson

Berry College - Campbell School of Business ( email )

2277 Martha Berry Hwy NW
Mount Berry, GA 30149
United States

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