Tolerance and Growth: Modeling the Empirical Relationship

9 Pages Posted: 16 Oct 2012

See all articles by Niclas Berggren

Niclas Berggren

Research Institute of Industrial Economics (IFN); University of Economics, Prague - Faculty of Economics and Public Administration

Mikael Elinder

Uppsala University - Department of Economics; Research Institute of Industrial Economics (IFN)

Date Written: October 15, 2012

Abstract

We showed, in Berggren and Elinder (2012), that tolerance toward homosexuals is negatively and quite robustly related to economic growth. In a comment, Bornhoff and Lee (forthcoming) question this finding on model-specification grounds. By undertaking three changes, they purport to show that our main result does not hold. In this article, we demonstrate that one of these changes is inconsequential (replacing GDP per capita by its logarithm in controlling for conditional convergence) and argue that two of them are questionable. First, the removal of certain central control variable risks introducing omitted variable bias and inconsistent estimates. Second, regional dummy variables are added on arbitrary grounds. For example, by using regional dummy variables that are just as reasonable as the Baltic dummy used by Bornhoff and Lee, we find that significance for tolerance toward homosexuals reappears in our empirical model. In all, this implies that there are good grounds for considering the negative relationship between tolerance towards homosexuals and growth valid, Bornhoff and Lee’s claims notwithstanding.

Keywords: tolerance, growth, diversity

JEL Classification: O40, Z13

Suggested Citation

Berggren, Niclas and Elinder, Mikael, Tolerance and Growth: Modeling the Empirical Relationship (October 15, 2012). Available at SSRN: https://ssrn.com/abstract=2161872 or http://dx.doi.org/10.2139/ssrn.2161872

Niclas Berggren (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se/nb

University of Economics, Prague - Faculty of Economics and Public Administration ( email )

nám. W. Churchilla 4
Praha, 130 67
Czech Republic

Mikael Elinder

Uppsala University - Department of Economics ( email )

Box 513
Uppsala, 751 20
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

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