Catching The Drivers of Inclusive Growth In Sub-Saharan Africa: An Application of Machine Learning

Ofori, Isaac K (2021): Catching The Drivers of Inclusive Growth In Sub-Saharan Africa: An Application of Machine Learning. Forthcoming in:

Abstract

A conspicuous lacuna in the literature on Sub-Saharan Africa (SSA) is the lack of clarity on variables key for driving and predicting inclusive growth. To address this, I train the machine learning algorithms for the Standard lasso, the Minimum Schwarz Bayesian Information Criterion (Minimum BIC) lasso, and the Adaptive lasso to study patterns in a dataset comprising 97 covariates of inclusive growth for 43 SSA countries. First, the regularization results show that only 13 variables are key for driving inclusive growth in SSA. Further, the results show that out of the 13, the poverty headcount (US$1.90) matters most. Second, the findings reveal that ‘Minimum BIC lasso’ is best for predicting inclusive growth in SSA. Policy recommendations are provided in line with the region’s green agenda and the coming into force of the African Continental Free Trade Area.

• Item Type: MPRA Paper
• Language: English
• Keywords: Clean Fuel; Economic Growth; Machine Learning; Lasso; Sub-Saharan Africa; Regularization; Poverty.
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C53 - Forecasting and Prediction Methods ; Simulation Methods; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C55 - Large Data Sets: Modeling and Analysis; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C63 - Computational Techniques ; Simulation Modeling; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C87 - Econometric Software; F - International Economics > F6 - Economic Impacts of Globalization; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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