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Dr. Halbert White paper most cited in economics literature since 1970
WASHINGTON, D.C., September 26, 2006—Economist Dr. Halbert White’s seminal 1980 paper on robust standard errors has achieved a unique distinction. It is the most cited paper in the economics literature over the last 35 years, according to a citation analysis by E. Han Kim, Adair Morse, and Luigi Zingales. Dr. White is a Founder of Bates White, LLC, and his article, “A Heteroskedasticity—Consistent Covariance Matrix Estimator and a Direct Test for Hetereoskedasticity,” had 4,318 citations, making it the paper most cited by others in peer-reviewed economics literature since 1970. The article was published in the preeminent economics journal, Econometrica.
Dr. White’s paper tackled a problem associated with regression analysis, the standard method used to analyze statistical relationships in economic data. The problem is that when the regression equation errors (the unexplained or random part of the statistical relationship) have variances that differ across observations (“heteroskedasticity”), the standard errors of the regression coefficient estimates cannot be properly computed by any of the then known techniques. Without these standard errors, there is no way to assess the uncertainty associated with the regression coefficient estimates, and no way to test hypotheses about the true relationship underlying the data (for example, that an employer’s wage policy was not discriminatory or that an alleged cartel had no effect on prices).
Generally, economists expect the regression equation errors to exhibit heteroskedasticity, but often not much is known beyond this fact. The prevalence of heteroskedacticity and its drastic adverse consequences make this a crucial problem for the analysis of economic data. Further, the problem was considered intractable, in that the only solutions then known required making possibly questionable assumptions about the nature of the variation in the regression error variances. Dr. White’s paper provided a solution, surprising at the time, that enabled researchers to estimate the regression coefficient standard errors but that did not require making unsupportable assumptions about the heteroskedasticity. These methods are now a standard part of practically every computer package that economists use for regression analysis.
Dr. White’s top ranking was the outcome of a study by E. Han Kim, Adair Morse, and Luigi Zingales, “What Has Mattered to Economics Since 1970,” Journal of Economic Perspectives 20, no. 4 (Fall 2006): 189–202. The study examined the articles from 41 major economics journals that had at least 500 citations in the Web of Science/Social Science Citation Index. There were 146 such articles.
For more information on Kim, Morse, and Zingales’s research visit http://faculty.chicagogsb.edu
/luigi.zingales/research/PSpapers/nber_cites.pdf.
About Bates White
Bates White is a national economic consulting firm of more than 150 professionals.
Established in 1999, Bates White offers consulting services in economics,
finance,
and business analytics. Bates White has offices in Washington, D.C., and San
Diego, Calif.
www.bateswhite.com
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