Sensitivity Analysis Through Mixed Gini and OLS Regressions

7 Pages Posted: 9 Aug 2011

See all articles by Shlomo Yitzhaki

Shlomo Yitzhaki

Hebrew University of Jerusalem - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: September 2010

Abstract

About thirty years ago Edward Leamer criticized the credibility of empirical research in economics. Since then there were huge improvements in research design, data collection and econometric methodology. On the other hand, the huge increase in computing power has increased the number of instruments available for the use of the over-zealous researcher who wants to prove his point. I suggest developing the mixed Gini and Ordinary Least Squares regression. It enables unraveling, tracing and testing the role of several whimsical assumptions imposed on the data in regression analysis. Among those assumptions are the linearity assumption, the use of monotonic increasing transformations, and the symmetry between distributions that is imposed by the Pearson correlation coefficient. My conjecture is that the new technique will reduce drastically the number of results that are claimed to be supported by empirical "proofs".

Suggested Citation

Yitzhaki, Shlomo, Sensitivity Analysis Through Mixed Gini and OLS Regressions (September 2010). American Economic Association, Ten Years and Beyond: Economists Answer NSF's Call for Long-Term Research Agendas, Available at SSRN: https://ssrn.com/abstract=1889374 or http://dx.doi.org/10.2139/ssrn.1889374

Shlomo Yitzhaki (Contact Author)

Hebrew University of Jerusalem - Department of Economics ( email )

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Jerusalem, 91905
Israel
+972 2 659 2201 (Phone)
+972 2 652 2319 (Fax)

National Bureau of Economic Research (NBER) ( email )

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United States

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