IDEAS home Printed from https://ideas.repec.org/p/hcx/wpaper/9806.html
   My bibliography  Save this paper

The Strengths and Weaknesses of Factor Analysis in Predicting Cuban GDP

Author

Listed:
  • Nicolas Sanchez

    (Department of Economics, College of the Holy Cross)

  • Miles Cahill

    (Department of Economics, College of the Holy Cross)

Abstract

This paper has a dual purpose. At the technical level, it updates the work of Gitanjali Joglekar and Andrew Zimbalist (1989) on the use of factor analysis to estimate per capita Gross Domestic Product (GDP) for Cuba. At the analytical level, it questions the validity of this approach when the underlying economic structure of factor analysis is based on the data of relatively unregulated economies such as those of other Latin American countries. The main conclusion of the paper is that while factor analysis is indeed a powerful predictor of the economic performance of market economies, it tends to overestimate the level of economic activity of command economies, and it fails to take into account subjective (i.e., utility-related) values which are assumed to be an intrinsic part of any measure of economic well being. If this criticism stands, then it follows that other similar studies of Cuban GDP are failing to provide a good measure of economic performance and well being in this island nation.

Suggested Citation

  • Nicolas Sanchez & Miles Cahill, 1998. "The Strengths and Weaknesses of Factor Analysis in Predicting Cuban GDP," Working Papers 9806, College of the Holy Cross, Department of Economics.
    • Handle: RePEc:hcx:wpaper:9806
    as

    Download full text from publisher

    File URL: http://lanic.utexas.edu/la/cb/cuba/asce/cuba8/32sanchez.pdf
    File Function: Final published version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jorge A. Sanguinetty, 1997. "The Structural Transformation of the Cuban Economy: A Report of the Last Twelve Months," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 7.
    2. Marshall, Jeffery H., 1998. "The political viability of free market experimentation in Cuba: Evidence from Los Mercados Agropecuarios," World Development, Elsevier, vol. 26(2), pages 277-288, February.
    3. Jorge Luis Romeu, 1995. "More on the Statistical Comparison of Cuban Socioeconomic Development," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 5.
    4. Betancourt, Roger R, 1996. "Growth Capabilities and Development: Implications for Transition Processes in Cuba," Economic Development and Cultural Change, University of Chicago Press, vol. 44(2), pages 315-331, January.
    5. Pissarides, Christopher A, 1997. "Learning by Trading and the Returns to Human Capital in Developing Countries," The World Bank Economic Review, World Bank, vol. 11(1), pages 17-32, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Miles Cahill & Nicolás Sánchez, 2001. "Using principal components to produce an economic and social development index: An application to Latin America and the U.S," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 29(3), pages 311-329, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nicolás Sánchez & Miles Cahill, 1998. "The Strengths and Weaknesses of Factor Analysis in Predicting Cuban GDP," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 8.
    2. M. March-Poquet, 2000. "What Type of Transition is Cuba Undergoing?," Post-Communist Economies, Taylor & Francis Journals, vol. 12(1), pages 91-117.
    3. repec:ilo:ilowps:366690 is not listed on IDEAS
    4. Nathalie Chusseau & Joël Hellier, 2012. "Globalisation and Inequality: Where do we stand?," Journal of Income Distribution, Ad libros publications inc., vol. 21(3-4), pages 7-34, November.
    5. Julien Gourdon, 2011. "Wage inequality in developing countries: South–South trade matters," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(4), pages 359-383, December.
    6. Ahmet Faruk Aysan, 2006. "The Effects of Volatility on Growth and Financial Development through Capital Market Imperfections," Working Papers 2006/12, Bogazici University, Department of Economics.
    7. Lo Turco, Alessia & Maggioni, Daniela, 2013. "Does Trade Foster Employment Growth in Emerging Markets? Evidence from Turkey," World Development, Elsevier, vol. 52(C), pages 1-18.
    8. Katherine Hirschfeld, 2006. "Sociolismo and the Underground Clinic: The Informal Economy and Health Services in Cuba," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 16.
    9. Lora, Eduardo & Olivera, Mauricio, 1998. "Macro Policy and Employment Problems in Latin America," IDB Publications (Working Papers) 6077, Inter-American Development Bank.
    10. Antonio Avalos & Andreas Savvides, 2006. "The Manufacturing Wage Inequality in Latin America and East Asia: Openness, Technology Transfer, and Labor Supply," Review of Development Economics, Wiley Blackwell, vol. 10(4), pages 553-576, November.
    11. Ebney Ayaj Rana & Mustafa Kamal, 2018. "Does Clientelism Affect Income Inequality? Evidence from Panel Data," Journal of Income Distribution, Ad libros publications inc., vol. 26(1), pages 1-24, March.
    12. Camilla Mastromarco & Laura Serlenga & Yongcheol Shin, 2012. "Is Globalization Driving Efficiency? A Threshold Stochastic Frontier Panel Data Modeling Approach," Review of International Economics, Wiley Blackwell, vol. 20(3), pages 563-579, August.
    13. Liu, Xiaohui & Wang, Chenggang, 2003. "Does foreign direct investment facilitate technological progress?: Evidence from Chinese industries," Research Policy, Elsevier, vol. 32(6), pages 945-953, June.
    14. Green, Francis & Dickerson, Andy & Saba Arbache, Jorge, 2001. "A Picture of Wage Inequality and the Allocation of Labor Through a Period of Trade Liberalization: The Case of Brazil," World Development, Elsevier, vol. 29(11), pages 1923-1939, November.
    15. Roger R. Betancourt & Carlos Seiglie, 1998. "Economic Development in the Tropics: Fiction or Possibility," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 8.
    16. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    17. Palakiyèm Kpemoua, 2016. "Levels Of Education And Economic Performances Of Togo [Niveaux D’Education Et Performances Economiques Du Togo]," Working Papers halshs-01506650, HAL.
    18. Sonali Deraniyagala & Ben Fine, 2000. "New Trade Theory Versus Old Trade Policy: A Continuing Enigma," Working Papers 102, Department of Economics, SOAS University of London, UK.
    19. Wong Hock Tsen, 2006. "Granger causality tests among openness to international trade, human capital accumulation and economic growth in China: 1952-1999," International Economic Journal, Taylor & Francis Journals, vol. 20(3), pages 285-302.
    20. Olfa CHEHAIDER, 2009. "LES DeTERMINANTS DE L’ACTIVITe DE RECHERCHE ET DeVELOPPEMENT DES ENTREPRISES MANUFACTURIeRES TUNISIENNES," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 29, pages 159-179.
    21. Ouoba, Youmanli, 2020. "Natural resources fund types and capital accumulation: A comparative analysis," Resources Policy, Elsevier, vol. 66(C).

    More about this item

    Keywords

    Cuba; Cuban GDP; factor analysis;
    All these keywords.

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hcx:wpaper:9806. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Victor Matheson (email available below). General contact details of provider: https://edirc.repec.org/data/deholus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.