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BEYOND THE STARS
Author(s) -
Sterck Olivier
Publication year - 2019
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/joes.12330
Subject(s) - ceteris paribus , economics , variable (mathematics) , metric (unit) , econometrics , macroeconomics , microeconomics , mathematics , operations management , mathematical analysis
It is frequent to hear in economic seminars or read in academic papers that an effect is economically significant or economically important. Yet, the economic literature is vague on what economic importance means and how it should be measured. In this paper, I show that existing measures of economic importance are flawed and misused. I derive a new metric that measures, in percentage terms, the contribution of each explanatory variable to deviations in the dependent variable, ceteris paribus. As an illustration, the method is applied to study the determinants of migration and the determinants of fertility.