Spearman's rho analysis of the associations between Barro Misery Index and its components in democratic states with application in Albania

• Author: Fejzi Kolaneci - Anisa Vrenozi - Ledia Canga
• Position: University of New York Tirana
• Pages: 83-94

83

ISSN 2410-759X

Acces online at www.iipccl.org

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Tirana-Albania Vol. 1 No. 3

January 2016

Spearman’s rho analysis of the associations between Barro Misery Index

and its components in democratic states with application in Albania

Prof. Dr. Fejzi Kolaneci

University of New York Tirana

PhD (C.) Anisa Vrenozi

University of New York Tirana

MSc (C.) Ledia Canga

University of New York Tirana

“The benevolent governments prefer lower inflation rates, lower unemployment

rates, lower long-term interest rates, and higher GDP growth rates”

Milton Friedman

Nobel Award Winner

Abstract

The main purpose of the study is to measure the associations between Barro misery

index (BMI) and its components: inflation rate (ë), unemployment rate (u), real GDP

growth rate (GDP), and nominal long-term interest rate (i), using Spearman rho coefficient

procedure. We use the quarterly data set and apply the formula:

BMI = ë + u – GDP + i

It seems rationale to estimate these associations, in order to develop an optimal control

of miserably process for a specified country during given time period.

We apply the statistical procedure for Albania during the period January 2005-December

2014. The sources of the official data are Albanian Institute of Statistics (INSTAT) and

Bank of Albania (BoA). If the data follow non-normal distribution, the Pearson’s

correlation coefficient method is not applicable. However, we can apply Spearman rho

coefficient procedure.

Some results of present study include:

ë and BMI are statistically dependent at the confidence level 99.9%

u and BMI are statistically dependent at the confidence level 99.9%

OMI and BMI are statistically dependent at the confidence level 99.99%

GDP and BMI are statistically dependent at the confidence level 99.9 %