Tolerance and growth: modeling the empirical relationship

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Abstract

We showed, in Berggren and Elinder (2012), that tolerance toward homosexuals is negatively and quite robustly related to economic growth. In a comment, Bornhoff and Lee (this issue) question this finding on model-specification grounds. By undertaking three changes, they purport to show that our main result does not hold. In this article, we demonstrate that one of these changes is inconsequential (replacing GDP per capita by its logarithm in controlling for conditional convergence) and argue that two of them are questionable. First, the removal of certain central control variable risks introducing omitted variable bias and inconsistent estimates. Second, regional dummy variables are added on arbitrary grounds. For example, by using regional dummy variables that are just as reasonable as the Baltic dummy used by Bornhoff and Lee, we find that significance for tolerance toward homosexuals reappears in our empirical model. In all, this implies that there are good grounds for considering the negative relationship between tolerance towards homosexuals and growth valid, Bornhoff and Lee’s claims notwithstanding.

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Notes

  1. 1.

    The tolerance measures are based on a survey in which respondents were asked if they would like to have homosexuals or people of a different race as neighbors. The fraction in each country that did not answer no is our basic measure of tolerance.

  2. 2.

    BL have added two countries to our sample of 54 without identifying them, which in itself could affect the results. In any case, in order to clarify the validity of our original contribution, we retain the original sample here.

  3. 3.

    In particular, Glaeser (2005) argues that in studies including tolerance, it is key to control for education and that failing to do so could generate misleading results.

  4. 4.

    Notably, in our Table 1 above Gini never attains statistical significance. One can add that columns (2) and (3) in BL’s Table 1 illustrate the perils of deleting variables because they do not attain statistical significance: Gini is not deleted by BL from (2) although being statistically insignificant; and simply by changing a variable in (3), significance is obtained.

  5. 5.

    We discuss the inclusion of China and Ireland in the next point, as they are supposedly included because of being outliers.

  6. 6.

    Furthermore, in Berggren and Elinder (2012), panel-data results showed statistical significance (and a negative sign) for Tolerance homosexualswithout the panel sample containing the Baltic countries. This provides further grounds for being careful about rejecting, in any categorical way, the presence of a negative effect of tolerance toward homosexuals on growth. BL provide no panel-data analysis.

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Acknowledgements

The authors wish to thank Christian Bjørnskov and Henrik Jordahl for helpful comments. Berggren is grateful to the Swedish Research Council for financial assistance.

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Correspondence to Niclas Berggren.

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Berggren, N., Elinder, M. Tolerance and growth: modeling the empirical relationship. Public Choice 153, 495–502 (2012). https://doi.org/10.1007/s11127-012-0034-x

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Keywords

  • Tolerance
  • Growth
  • Diversity

JEL Classification

  • O40
  • Z13