NS4301Summer Term 2015

Predicting Expropriation

Overview

• Randal Jones, “A Model for Predicting Expropriation in Latin America: Applied to Jamaica,” Colombia Journal of World Business, 2001

• Illustration of several statistical techniques

• Data Reduction – Factor Analysis

• Profiling – Discriminant Analysis

• Quantum Change -- Threshold Analysis

• Problems

• Large data set

• Little in way of theory

• Not clear data set captures relevant factors underlying expropriation

2

Data Set I

3

Data Set II

4

Data Set III

5

Data Set IV

6

Data Set V

7

Factor Analysis: Data Reduction

8

Grouping/Discriminate Analysis

9

Discriminate Scores: Probabilities of Correct Placement

10

Correct Group Placement

11

Model Applied to Jamaica

• Jamaica expropriates in 1974

• How well did the model do in prediction?

12