assignment1_09-09-24 - Econ 324: Economic Development...

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1 Econ 324: Economic Development Assignment 1 (Due in class Monday October 19, 2009) [Please hand in your own solutions – do not solve in teams] 1. Robustness of the Cross-Country Income – Poverty Relationship The objective of this question is to assess whether modifications to the regression model in Besley & Burgess (2003) affect the conclusions regarding the sufficiency of promoting national income per capita growth to achieve the MDG poverty goal. Table 1 (see p. 3) shows estimates of variations on the Besley and Burgess (2003) regression model: ln P it = θ i + η ln μ it + β 1 ln X 1it + … + β K ln X Kit + ε it where the additional explanatory variables are the (natural log of) each country’s Gini coefficient, population, and urban population share. Analogous models are shown with the (natural log of the) poverty gap as the dependent variable. 1. Test for the statistical significance of each estimate of the η partial correlation in each model. [5 points] 2. Calculate the predicted annual growth rate of national income per capita necessary to
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assignment1_09-09-24 - Econ 324: Economic Development...

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