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♦ East Asia and the Pacific

♦ Latin America and the Caribbean

♦ Middle East and North Africa

♦ Sub-Saharan Africa

FIGURE 2.7 Growth rates of real manufacturing wages and exports. Data are for 50 developing countries during 1970-90.

Source: The World Bank, World Development Report 1995, p. 55. The original source is UNIDO data, World Bank data.

54 PART ONE: SINGLE-EQUATION REGRESSION MODELS

Regional averages

♦ Latin-America and the Caribbean

♦ East Asia and the Pacific

♦ South Asia

♦ Industrial market economies

♦ Sub-Saharan Africa

FIGURE 2.8 Skill intensity of exports and human capital endowment. Data are for 126 industrial and developing countries in 1985. Values along the horizontal axis are logarithms of the ratio of the country's average educational attainment to its land area: vertical axis values are logarithms of the ratio of manufactured to primary-products exports.

Source: World Bank, World Development Report 1995, p. 59. Original sources: Export data from United Nations Statistical Office COMTRADE data base; education data from UNDP 1990; land data from the World Bank.

2.11. From the scattergram given in Figure 2.8, what general conclusions do you draw? What is the economic theory that underlies this scattergram? (Hint: Look up any international economics textbook and read up on the Heckscher-Ohlin model of trade.)

2.12. What does the scattergram in Figure 2.9 reveal? On the basis of this diagram, would you argue that minimum wage laws are good for economic well-being?

2.13. Is the regression line shown in Figure I.3 of the Introduction the PRF or the SRF? Why? How would you interpret the scatterpoints around the regression line? Besides GDP, what other factors, or variables, might determine personal consumption expenditure?

Problems

2.14. You are given the data in Table 2.7 for the United States for years 1980-1996.

CHAPTER TWO: TWO-VARIABLE REGRESSION ANALYSIS: SOME BASIC IDEAS 55

Ratio of one year's salary at minimum wage to GNP per capita

FIGURE 2.9 The minimum wage and GNP per capita. The sample consists of 17 developing countries. Years vary by country from 1988 to 1992. Data are in international prices.

Source: World Bank, World Development Report 1995, p. 75.

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