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Appendix II: Calculations and tests related to <strong>the</strong> validation of <strong>the</strong> model<br />

ECE Countries<br />

Bulgaria<br />

Years m<br />

Relative<br />

wage<br />

H/H0<br />

Theoretical<br />

gamma 0.43<br />

1991 1.3% 12.76 1.30055145 1.73243252<br />

1992 1.3% 12.76 1.30467736 1.74396915<br />

1993 1.3% 12.76 1.30060633 1.7325857<br />

1994 1.3% 12.76 1.30143016 1.73488613<br />

1995 1.3% 12.76 1.30968771 1.7580334<br />

1996 1.3% 12.76 1.30803936 1.75339979<br />

H/H0<br />

Theoretical<br />

gamma 0.75 H/H0 Observed<br />

1997 1.4% 12.76 1.32564367 1.8032222 1.11<br />

1998 1.4% 12.76 1.32170581 1.79201323 1.11<br />

1999 1.4% 12.76 1.33580341 1.83231298 1.11<br />

2000 1.5% 12.76 1.3629798 1.91134458 1.07<br />

2001 1.5% 12.76 1.36506992 1.91749628 1.04<br />

2002 1.6% 12.76 1.39142771 1.9959757 1.04<br />

2003 1.9% 12.76 1.45635137 2.19643966 1.03<br />

2004 2.0% 12.76 1.48330395 2.28266425 1.03<br />

mean 1.34766271 1.87048397 1.06593392<br />

st dev 0.05909255 0.17688049 0.037368131<br />

p-value 3.9464E-08 1.3154E-06<br />

t test 7.66085045 6.24420149<br />

Years m<br />

Relative<br />

wage<br />

H/H0<br />

Theoretical<br />

alpha 0.33<br />

H/H0<br />

Theoretical<br />

alpha 0.5<br />

H/H0<br />

Theoretical<br />

alpha 0.75<br />

1991 1.3% 12.76 1.00710488 1.03056691 1.104848173<br />

1992 1.3% 12.76 1.00719413 1.03095932 1.106221077<br />

1993 1.3% 12.76 1.00710607 1.03057213 1.104866445<br />

1994 1.3% 12.76 1.0071239 1.03065054 1.105140702<br />

1995 1.3% 12.76 1.00730224 1.03143496 1.107886139<br />

1996 1.3% 12.76 1.00726671 1.03127859 1.107338609<br />

H/H0<br />

Observed<br />

1997 1.4% 12.76 1.00764462 1.03294339 1.113173218 1.11<br />

1998 1.4% 12.76 1.00756039 1.032572 1.111870567 1.11<br />

1999 1.4% 12.76 1.00786111 1.0338989 1.116527552 1.11<br />

2000 1.5% 12.76 1.00843452 1.03643621 1.125454536 1.07<br />

2001 1.5% 12.76 1.00847828 1.03663024 1.126138395 1.04<br />

2002 1.6% 12.76 1.0090261 1.0390639 1.134729753 1.04<br />

2003 1.9% 12.76 1.01034436 1.04495675 1.155642262 1.03<br />

2004 2.0% 12.76 1.01087913 1.04736231 1.164223714 1.03<br />

mean 1.00809475 1.03495187 1.120290082 1.065934<br />

st dev 0.00122509 0.005446 0.019236172 0.037368<br />

p-value 0.00344642 0.07299119 0.003867595<br />

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