Shadow Economies and Corruption All Over the World - Index of - IZA

7 Appendix 2: Definition of the variables and data sources
7.1 Some general remarks
(1) All calculations and estimations are based on the software package “Intercooled Stata 8.0”
(2) All growth rates or shares as described in the following section. For example a growth rate
of 2 % is defined as 0.02 instead of 2.0.
(3) In for some reasons observations for important countries for 1 year are missing we used
the following formula to calculate the average growth rate for these variables:
(variable t+n / variable t) 1/n
Multiplying the value of the variable from year t with the average growth rate gives the value
for t+1. Formally:
(Average growth rate) x (variable t) = variable t+1
7.2 Definition of the data and sources
(1) GDP per capita on PPP basis
GDP per capita is based on purchasing power parity [PPP]. PPP GDP is gross domestic
product converted to international dollars using purchasing power parity rates. An
international dollar has the same purchasing power over GDP as the U.S. dollar has in the
United States. GDP is the sum of gross value added by all resident producers in the economy
plus any product taxes and minus any subsidies not included in the value of the products. It is
calculated without making deductions for depreciation of fabricated assets or for depletion
and degradation of natural resources. Data are in current dollars.
Source: World Bank, International Comparison Programme database.
(2) Annual GDP per capita Growth Rate
Out of this GDP per capita values for the observed 145 countries the independent variable
annual GDP per capita Growth Rate has been calculated using the formula
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