1.Diagnosing Proxy-Variable Bias in Macroeconomics
Scatter plot and tables · 2026
An international trade economist used a scatter plot and data tables to analyze trade openness across 30 major economies from 2010 to 2023. The initial bivariate relationship between Log GDP and Trade Openness showed an OLS line slope of -24.49 and an R² of 0.195. However, expanding the model to include Log Population caused the Log GDP estimate to collapse to -0.92, while Log Population captured the negative effect at -20.69. The dashboard also highlighted outliers like Singapore at 340.35% and Ireland at 222.98% average trade openness.
What it shows:
How to identify and resolve proxy-variable bias using coefficient detail tables.




