Download Lab15B - Pearson Higher Education

Lab 15B
Explaining the Resource Curse
Assignment
In this lab, you will explore several explanations for the existence of the resource curse. The data
for this lab is in an Excel spreadsheet and a Stata data set on the textbook web page.
1. Describe the variation in reliance on natural resources across countries. What is the
minimum value of energy depletion (as a percent of national income)? What is the
maximum value? Do countries that have higher values for energy depletion have above
average incomes? Do your calculations provide evidence of a “resource curse”?
Explain.
2. Create an overall index of resource reliance by adding together energy depletion, forest
depletion, and mineral depletion (all measured as a percent of national income). How do
you expect this index would be related to corruption control? Explain. Make a scatter
plot that shows this relationship. Does it support your idea?
3. How would you expect the overall index you constructed in #2 to be related to
investments in education? Make a scatter plot that shows the relationship between
secondary school enrollment rates and this index. Does it support your ideas? Explain.
4. How would you expect the overall index you constructed in #2 to be related to
investment? Make a scatter plot that shows the relationship between investment rates and
this index. Does it support your ideas? Explain.
5. How would you expect the overall index you constructed in #2 to be related to the
importance of industry in an economy? Make a scatter plot that shows the relationship
between this index and the percent of GDP attributed to industry. Does it support your
ideas? Explain.
6. Using the results from questions one through five above. Discuss possible reasons for the
resource curse. Do your graphs provide evidence for any of these ideas? Discuss the
policy implications of your findings.