Tuesday, May 11, 2010

Correlation of the day: The big story

This is the massive big story of development. While the cross-sectional/pooled strong association between life expectancy and GDP per capita is well known, this selective plot (from De la Croix, 2008 from UC Louvain) shows that the correlation within a country can be near perfect. 
De la Croix (2008) argues that the improvement in mortality preceded and was a precondition of the subsequent industrialization. He provides some very interesting arguments based on (rather obscure) historical data (Venetian dataset, aristocrats, Swedish prisoners). Certainly worthwhile having a look at for those interested in economic history, and once more a case that shows how important it is to reconstruct historical time series in order to capture long-run trends. (Credits go to Prof Murphy for pointing to this paper).

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