Comparing Time Series Cross-Section Model Specifications: The Case of Welfare State Development

Comparing Time Series Cross-Section Model Specifications: The Case of Welfare State Development In recent years, an impressive number of pooled time series (TSCS) cross-section models have been estimated in order to test hypotheses on welfare state development. Although most of these models share several of the variables, they can often be distinguished by the model specification adopted. This begs the question: what is the appropriate specification for modeling welfare state development? In order to answer this question some leading specifications are evaluated with respect to their ability to meet the theoretical assumptions about the theory of welfare state evolution in addition to the econometric canons on panel analysis. The main conclusions of this paper are the following. First, all specifications in levels are econometrically unfounded because most of the variables typically used for analyzing this topic cannot be considered to be stationary. Second, although a first difference model performs better from an econometric point of view, it is unable to test the hypothesized long-term relationships underlying welfare state dynamics. Third, and more importantly, the single equation error correction model represents the best pooled TSCS specification for modeling welfare state development since it is able tocapture long-run effects even in the presence of nonstationary processes. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Quality & Quantity Springer Journals

Comparing Time Series Cross-Section Model Specifications: The Case of Welfare State Development

Loading next page...
 
/lp/springer_journal/comparing-time-series-cross-section-model-specifications-the-case-of-OAzz04zjV0
Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2006 by Springer
Subject
Social Sciences; Methodology of the Social Sciences; Social Sciences, general
ISSN
0033-5177
eISSN
1573-7845
D.O.I.
10.1007/s11135-005-2076-3
Publisher site
See Article on Publisher Site

Abstract

In recent years, an impressive number of pooled time series (TSCS) cross-section models have been estimated in order to test hypotheses on welfare state development. Although most of these models share several of the variables, they can often be distinguished by the model specification adopted. This begs the question: what is the appropriate specification for modeling welfare state development? In order to answer this question some leading specifications are evaluated with respect to their ability to meet the theoretical assumptions about the theory of welfare state evolution in addition to the econometric canons on panel analysis. The main conclusions of this paper are the following. First, all specifications in levels are econometrically unfounded because most of the variables typically used for analyzing this topic cannot be considered to be stationary. Second, although a first difference model performs better from an econometric point of view, it is unable to test the hypothesized long-term relationships underlying welfare state dynamics. Third, and more importantly, the single equation error correction model represents the best pooled TSCS specification for modeling welfare state development since it is able tocapture long-run effects even in the presence of nonstationary processes.

Journal

Quality & QuantitySpringer Journals

Published: Aug 12, 2005

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve Freelancer

DeepDyve Pro

Price
FREE
$49/month

$360/year
Save searches from
Google Scholar,
PubMed
Create lists to
organize your research
Export lists, citations
Read DeepDyve articles
Abstract access only
Unlimited access to over
18 million full-text articles
Print
20 pages/month
PDF Discount
20% off