Empirical Econometric Evaluation of Alternative Methods of Dealing with Missing Values in Investment Climate Surveys

100 Pages Posted: 20 Apr 2016

See all articles by Álvaro Escribano

Álvaro Escribano

Universidad Carlos III de Madrid - Department of Economics

Jorge Pena

Universidad Carlos III de Madrid

J. Luis Guasch

World Bank - Finance, Private Sector and Infrastructure Sector (LCSFP)

Date Written: June 1, 2010

Abstract

Investment climate Surveys are valuable instruments that improve our understanding of the economic, social, political, and institutional factors determining economic growth, particularly in emerging and transition economies. However, at the same time, they have to overcome some difficult issues related to the quality of the information provided; measurement errors, outlier observations, and missing data that are frequently found in these datasets. This paper discusses the applicability of recent procedures to deal with missing observations in investment climate surveys. In particular, it presents a simple replacement mechanism -- for application in models with a large number of explanatory variables -- which in turn is a proxy of two methods: multiple imputations and an export-import algorithm. The performance of this method in the context of total factor productivity estimation in extended production functions is evaluated using investment climate surveys from four countries: India, South Africa, Tanzania, and Turkey. It is shown that the method is very robust and performs reasonably well even under different assumptions on the nature of the mechanism generating missing data.

Keywords: E-Business, Statistical & Mathematical Sciences, Economic Theory & Research, Information Security & Privacy, Information and Records Management

Suggested Citation

Escribano, Álvaro and Pena, Jorge and Guasch, José Luis, Empirical Econometric Evaluation of Alternative Methods of Dealing with Missing Values in Investment Climate Surveys (June 1, 2010). World Bank Policy Research Working Paper No. 5346. Available at SSRN: https://ssrn.com/abstract=1629631

Álvaro Escribano (Contact Author)

Universidad Carlos III de Madrid - Department of Economics ( email )

Calle Madrid 126
Getafe, 28903
Spain
+34-91 6249854 (Phone)
+34-91 6249329 (Fax)

HOME PAGE: http://www.eco.uc3m.es/english/staff/contact_info/

Jorge Pena

Universidad Carlos III de Madrid ( email )

Avenida Universidad Carlos III, 22
Colmenarejo, 28270
Spain

José Luis Guasch

World Bank - Finance, Private Sector and Infrastructure Sector (LCSFP) ( email )

1818 H Street, NW
Washington, DC 20433
United States
202 473 8606 (Phone)
202 522 2106 (Fax)

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