Which of these factors sound like the factors of production

Assignment Help Business Management

Reference no: EM131832704

One way to learn about what makes some countries richer is to run statistical tests to see which factors are good at predicting a nation's level of productivity.

Sometimes it turns out that a relationship is just a coincidence (like the fact that people in rich countries eat more ice cream), but other statistical tests really can tell you about the ultimate causes of productivity. A statistical test can't tell you everything, but it might help point you in the right direction.

In courses on econometrics and statistics, you can learn about how to run sensible tests. Let's look at one well-known set of tests, to see if what you learned in this chapter matches the statistical evidence.

Here are 17 variables that turned out to be very strong predictors of a nation's long-run economic performance in literally millions of statistical tests (Source: Salai-Martin, X., G. Doppelhofer, and R. Miller. 2004.

Determinants of long-term economic growth: A Bayesian averaging of classical estimates (BACE). The American Economic Review, 94(4) (September): 813-835.) They are in rank order, and a "+" means more of that value was good for long-run productivity:

1. Whether a country is in East Asia (+)

2. Level of K-6 schooling (+)

3. Price of capital goods (-)

4. Fraction of land close to the coast (+)

5. Fraction of population close to the coast (-)

6. Malaria prevalence (-)

7. Life expectancy (+)

8. Fraction of population Confucian (+)

9. Whether a country is in Africa (-)

10. Whether a country is in Latin America (-)

11. Fraction of GDP in mining industries (+)

12. Whether a country was a Spanish colony (-)

13. Years open to relatively free trade (+)

14. Fraction of population Muslim (+)

15. Fraction of population Buddhist (+)

16. Number of languages widely spoken (-)

17. Fraction of GDP spent on government purchases (-)

a. Which of these factors sound like the "three factors of production"? Which ones do they sound like?

b. Which of these factors sound like the "five key institutions"? Which ones do they sound like?

c. Which of these factors sound like geography?

d. The Western United States was a Spanish colony until 1849. On average, former Spanish colonies have had poor economic performance. Does the Western United States fit that pattern? Why or why not?

Reference no: EM131832704

Questions Cloud

Why have three advertising budgets : Communists believed that their system would be much more efficient than capitalism: They thought that competition between companies was wasteful.

Sample from a normal distribution : Suppose that Xl. " " XIO form a random sample from a normal distribution for which both the mean and the variance are unknown

What do you think creates the good institutions that exist : Why do you think expensive red tape is difficult to get rid of in many poor countries? Yes, this is a miniature version of the previous question.

Determining the differential brightness : Suppose that the differential brightness B of a certain star has an unknown value, and that it is desired to test the following simple hypotheses:

Which of these factors sound like the factors of production : Which of these factors sound like the "three factors of production"? Which ones do they sound like?Which of these factors sound like geography?

Computing the product of all elements in an array : Computing the product of all elements in an array. Counting how many elements in an array are negative.

List the sample space : List the sample space. Using the sample space list, determine the probability that the customer will select a sample with exactly one defect.

Declare an array list primes of integers : Declare an array list primes of integers that contains the first five prime numbers (2, 3, 5, 7, and 11).

Example of a random phenomenon : Give an example of a random phenomenon that would be studied by (i) a physicist, (ii) a geneticist, (iii) a traffic engineer, (iv) a quality-control engineer

User Account

All Pages