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2 - Running simple regressions

Global poverty and economic growth

Published online by Cambridge University Press:  05 June 2014

Michelle C. Baddeley  and
Diana V. Barrowclough
Michelle C. Baddeley
Affiliation:
University of Cambridge
Diana V. Barrowclough
Affiliation:
United Nations Conference on Trade and Development (UNCTAD), Geneva
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Summary

The test of our progress is not whether we add to the abundance of those who have much; it is whether we provide enough for those who have too little.

US President Franklin D. Roosevelt, 2nd inaugural address, 1937.

Economic issues include:

  • Poverty reduction – the role of investment and trade

  • Millennium Development Goals (MDGs)

  • Development economics and development institutions

Econometric issues include:

  • Correlation coefficients

  • Running OLS regressions ‘by hand’

  • Single hypothesis tests: Student's t test

  • Point estimates and confidence intervals

  • Goodness of fit and the coefficient of determination

Data issues include:

  • Quantitative indicators of development

  • A qualitative indicator – the Human Poverty Index

The issue

How can we reduce poverty and improve living standards for the poor? There are no easy answers and in addressing the problems of global poverty, the world's heads of state met in September 2000 to discuss a universal framework for development, agreeing on targets to promote development. The then 189 UN member states agreed to the eight Millennium Development Goals (MDGs) listed in Box 2.1. Poverty reduction was one of these primary goals and the UN member states pledged to halve world poverty by 2015. These goals were reaffirmed at the World Summit held in September 2005, and the issue has been kept alive ever since by a number of high-profile awareness-raising and fund-raising events, backed by a diverse range of people – rockstars included.

Box 2.1 The Millennium Development Goals (MDGs)

• Eradicate extreme poverty and hunger

• Achieve universal primary education

• Promote gender equality and empower women

• Reduce child mortality

• Improve maternal health

• Combat HIV/AIDS, malaria and other diseases

• Ensure environmental sustainability

• Develop a global partnership for development

Source: www.un.org/millenniumgoals/
Type
Chapter
Information
Running Regressions
A Practical Guide to Quantitative Research in Economics, Finance and Development Studies
 , pp. 36 - 63
Publisher: Cambridge University Press
Print publication year: 2009

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References

Addison, A., Hulme, D. and Kanbur, R. (2008) Poverty Dynamics, Oxford: Oxford University Press.Google Scholar
Lipsey, R. and Chrystal, A. (2007) Economics (11th edition), Oxford: Oxford University Press. Chapters 33–34.Google Scholar
Sen, A. (1981) Poverty and Famines, Oxford: Oxford University Press.Google Scholar
Thirlwall, A. P. (2005) Growth and development (8th edition), London: Macmillan. Chapters 1, 2 and 16.Google Scholar
,Asian Development Bank (ADB) (2008), ‘Special chapter: Comparing poverty across countries: the role of purchasing power parities’, in Key Indicators for Asia and the Pacific 2008, Manila: ADB, pp. 3–54.Google Scholar
Atkinson, A. B. (1987) ‘On the measurement of poverty’, Econometrica vol. 55, no. 4, 749–64.CrossRefGoogle Scholar
Chen, S. and Ravallion, M. (2000) How Did the World's Poor Fare in the 1990s, Washington: World Bank.Google Scholar
Collier, P. and Dollar, D. (2001) ‘Can the world cut poverty in half? How policy reform and effective aid can meet International Development Goals, World Development, vol. 29, no. 11, 1727–802.CrossRefGoogle Scholar
Mankiw, G., Romer, D. and Weil, D. (1992) A Contribution to the Empirics of Economic Growth, NBER Working Paper, No. 3541.
Ravallion, M., Chen, S. and Sangraula, P. (2008), A Dollar a Day Revisited, World Bank Policy Research Working Paper No. 4620, Washington:World Bank.CrossRefGoogle Scholar
Rodrik, D. (1999) The New Global Economy, Making Openness Work, Policy Essay No. 24,Overseas Development Council, Washington D.C.Google Scholar
Solow, R. (1956) ‘A contribution to the theory of economic growth’, Quarterly Journal of Economics, vol. 70, 65–94.CrossRefGoogle Scholar
Swan, T. (1956) ‘Economic growth and capital accumulation’, Economic Record, vol. 32, no. 2, 334–61.CrossRefGoogle Scholar
,UNMillennium Development Goals Report 2007, Geneva: United Nations.Google Scholar
,UNCTAD (2008) Least Developed Countries Report, Geneva and New York: United Nations.Google Scholar
,UNDP (annual), Human Development Report, Geneva: United Nations Development Program.
,World Bank (annual), World Development Report, Washington: World Bank Group.
Addison, A., Hulme, D. and Kanbur, R. (2008) Poverty Dynamics, Oxford: Oxford University Press.Google Scholar
Lipsey, R. and Chrystal, A. (2007) Economics (11th edition), Oxford: Oxford University Press. Chapters 33–34.Google Scholar
Sen, A. (1981) Poverty and Famines, Oxford: Oxford University Press.Google Scholar
Thirlwall, A. P. (2005) Growth and development (8th edition), London: Macmillan. Chapters 1, 2 and 16.Google Scholar
,Asian Development Bank (ADB) (2008), ‘Special chapter: Comparing poverty across countries: the role of purchasing power parities’, in Key Indicators for Asia and the Pacific 2008, Manila: ADB, pp. 3–54.Google Scholar
Atkinson, A. B. (1987) ‘On the measurement of poverty’, Econometrica vol. 55, no. 4, 749–64.CrossRefGoogle Scholar
Chen, S. and Ravallion, M. (2000) How Did the World's Poor Fare in the 1990s, Washington: World Bank.Google Scholar
Collier, P. and Dollar, D. (2001) ‘Can the world cut poverty in half? How policy reform and effective aid can meet International Development Goals, World Development, vol. 29, no. 11, 1727–802.CrossRefGoogle Scholar
Mankiw, G., Romer, D. and Weil, D. (1992) A Contribution to the Empirics of Economic Growth, NBER Working Paper, No. 3541.
Ravallion, M., Chen, S. and Sangraula, P. (2008), A Dollar a Day Revisited, World Bank Policy Research Working Paper No. 4620, Washington:World Bank.CrossRefGoogle Scholar
Rodrik, D. (1999) The New Global Economy, Making Openness Work, Policy Essay No. 24,Overseas Development Council, Washington D.C.Google Scholar
Solow, R. (1956) ‘A contribution to the theory of economic growth’, Quarterly Journal of Economics, vol. 70, 65–94.CrossRefGoogle Scholar
Swan, T. (1956) ‘Economic growth and capital accumulation’, Economic Record, vol. 32, no. 2, 334–61.CrossRefGoogle Scholar
,UNMillennium Development Goals Report 2007, Geneva: United Nations.Google Scholar
,UNCTAD (2008) Least Developed Countries Report, Geneva and New York: United Nations.Google Scholar
,UNDP (annual), Human Development Report, Geneva: United Nations Development Program.
,World Bank (annual), World Development Report, Washington: World Bank Group.

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