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A Broad View of Regional ScienceCeteris Paribus and Fixed Effects in Regional and Cultural Economics

A Broad View of Regional Science: Ceteris Paribus and Fixed Effects in Regional and Cultural... [This chapter is inspired by Peter Nijkamp’s contribution “Ceteris Paribus, Spatial Complexity and Spatial Equilibrium” and his original take on the deficiencies of using the ceteris paribus assumption in regional economic modelling. After summarizing Nijkamp’s interpretative perspective of the ceteris paribus assumption within theoretical modelling, I suggest an analytical analogy between the ceteris paribus assumption in theoretical modelling and the use of fixed effects in empirical modelling. I argue that fixed effects have the economic meaning of the ceteris paribus assumption in empirical work and could lead to erroneous implications in empirical results, especially with regard to understanding cultural relativity across space. The chapter illustrates this point through an example focused on religion as one of the most important proxies for culture in the economic literature. The operationalization of the example draws on data from the World Value Survey (WVS) and employs detailed data decomposition and logistic regression analyses. The use of fixed effects is contrasted to precise quantification of cultural interactions, cultural relativity and cultural hysteresis. The chapter shows how significant effects from cultural complexity can be lost or overseen in the interpretative analysis of empirical findings when fixed effects are used in the spirit of the ceteris paribus assumption.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

A Broad View of Regional ScienceCeteris Paribus and Fixed Effects in Regional and Cultural Economics

Part of the New Frontiers in Regional Science: Asian Perspectives Book Series (volume 47)
Editors: Suzuki, Soushi; Patuelli, Roberto
Tubadji, Annie
A Broad View of Regional Science — Jan 20, 2021
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23 pages

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Publisher
Springer Singapore
Copyright
© Springer Nature Singapore Pte Ltd. 2021
ISBN
978-981-33-4097-8
Pages
175 –198
DOI
10.1007/978-981-33-4098-5_10
Publisher site
See Chapter on Publisher Site

Abstract

[This chapter is inspired by Peter Nijkamp’s contribution “Ceteris Paribus, Spatial Complexity and Spatial Equilibrium” and his original take on the deficiencies of using the ceteris paribus assumption in regional economic modelling. After summarizing Nijkamp’s interpretative perspective of the ceteris paribus assumption within theoretical modelling, I suggest an analytical analogy between the ceteris paribus assumption in theoretical modelling and the use of fixed effects in empirical modelling. I argue that fixed effects have the economic meaning of the ceteris paribus assumption in empirical work and could lead to erroneous implications in empirical results, especially with regard to understanding cultural relativity across space. The chapter illustrates this point through an example focused on religion as one of the most important proxies for culture in the economic literature. The operationalization of the example draws on data from the World Value Survey (WVS) and employs detailed data decomposition and logistic regression analyses. The use of fixed effects is contrasted to precise quantification of cultural interactions, cultural relativity and cultural hysteresis. The chapter shows how significant effects from cultural complexity can be lost or overseen in the interpretative analysis of empirical findings when fixed effects are used in the spirit of the ceteris paribus assumption.]

Published: Jan 20, 2021

Keywords: Ceteris paribus; Fixed effects; Religion; Culture; Decomposition; Logistic regression; Cultural interactions; Cultural complexity; Nonlinearity; Z10; R11

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