The results of the estimation of the transformed first-differenced model of
eqs. (12) and (13) are presented in the third and fourth columns of tables 2, 3
and 4.r6 The differences between these results and the re-estimated K-H-R
results are most striking, suggesting that the latter estimates may have been
biased.17 The estimated coefficients for land become much larger and
statistically significant (although probably too large for all countries and for
the LDC’s). The estimates of the technological change coefficients now have
the expected signs. However, the estimated coefficients for general education
still appear unreasonably large. We conclude that the general education
variables as defined and measured are unsatisfactory. We dropped the
general education variables and reestimated, the results of which are reported
in the fifth columns of tables 2, 3 and 4. The estimated coefficients in the fifth
columns seem reasonable and consistent with a priori expectations. In
particular, the estimated technological change coefficients are positive for
both even though they are higher for the DC’s than for the LDC’s.
By estimating both eqs. (3) and (9) for all observations we can use the
sums of squared residuals to test the hypothesis of non-existence of the
country-specific effects other than the LDC effect. In other words, the null
hypothesis is