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In the quest for economic significance: Assessing variable importance through mean value decomposition
Blekinge Institute of Technology, Faculty of Engineering, Department of Industrial Economics.
2014 (English)In: Applied Economics Letters, ISSN 1350-4851, E-ISSN 1466-4291, Vol. 21, no 8, 545-549 p.Article in journal (Refereed) Published
Abstract [en]

Economic significance is frequently assessed through statistical hypothesis testing, which however, does not always correspond to the implicit economical questions being addressed. In this article we propose using mean value decomposition to assess economic significance. Unlike most previously suggested methods the proposed one is intuitive and simple to conduct. The technique is demonstrated and contrasted with hypothesis tests by an empirical example involving the income of Mexican children, which shows that the two inference approaches provide different and supplementary pieces of information.

Place, publisher, year, edition, pages
Routledge , 2014. Vol. 21, no 8, 545-549 p.
Keyword [en]
conditioning, economic significance, regression analysis, mean value decomposition, goodness-of-fit
National Category
Business Administration Economics
URN: urn:nbn:se:bth-6382DOI: 10.1080/13504851.2013.872757ISI: 000332196800008Local ID: diva2:833881
The earlier version of paper is also published in following two working paper series:,%20Norman ,%20Tavassoli_In%20the%20Quest%20for%20Economic%20Significance_pdf/$file/Wp%2020 13_3_Holgersson,%20Norman,%20Tavassoli_In%20the%20Quest%20for%20Economic%20Signi ficance.pdfAvailable from: 2015-05-18 Created: 2014-03-11 Last updated: 2015-06-30Bibliographically approved

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