Building a dataset for political science analysis in R, PART 2

Packages we will need

library(tidyverse)
library(peacesciencer)
library(countrycode)
library(bbplot)

The main workhorse of this blog is the peacesciencer package by Stephen Miller!

The package will create both dyad datasets and state datasets with all sovereign countries.

Thank you Mr Miller!

There are heaps of options and variables to add.

Go to the page to read about them all in detail.

Here is a short list from the package description of all the key variables that can be quickly added:

We create the dyad dataset with the create_dyadyears() function. A dyad-year dataset focuses on information about the relationship between two countries (such as whether the two countries are at war, how much they trade together, whether they are geographically contiguous et cetera).

In the literature, the study of interstate conflict has adopted a heavy focus on dyads as a unit of analysis.

Alternatively, if we want just state-year data like in the previous blog post, we use the function create_stateyears()

We can add the variables with type D to the create_dyadyears() function and we can add the variables with type S to the create_stateyears() !

Focusing on the create_dyadyears() function, the arguments we can include are directed and mry.

The directed argument indicates whether we want directed or non-directed dyad relationship.

In a directed analysis, data include two observations (i.e. two rows) per dyad per year (such as one for USA – Russia and another row for Russia – USA), but in a nondirected analysis, we include only one observation (one row) per dyad per year.

The mry argument indicates whether they want to extend the data to the most recently concluded calendar year – i.e. 2020 – or not (i.e. until the data was last available).

dyad_df <- create_dyadyears(directed = FALSE, mry = TRUE) %>%
  add_atop_alliance() %>%  
  add_nmc() %>%
  add_cow_trade() %>% 
  add_creg_fractionalization() 

I added dyadic variables for the

You can follow these links to check out the codebooks if you want more information about descriptions about each variable and how the data were collected!

The code comes with the COW code but I like adding the actual names also!

dyad_df$country_1 <- countrycode(dyad_df$ccode1, "cown", "country.name")

With this dataframe, we can plot the CINC data of the top three superpowers, just looking at any variable that has a 1 at the end and only looking at the corresponding country_1!

According to our pals over at le Wikipedia, the Composite Index of National Capability (CINC) is a statistical measure of national power created by J. David Singer for the Correlates of War project in 1963. It uses an average of percentages of world totals in six different components (such as coal consumption, military expenditure and population). The components represent demographic, economic, and military strength

First, let’s choose some nice hex colors

pal <- c("China" = "#DE2910",
         "United States" = "#3C3B6E", 
         "Russia" = "#FFD900")

And then create the plot

dyad_df %>% 
 filter(country_1 == "Russia" | 
          country_1 == "United States" | 
          country_1 == "China") %>% 
  ggplot(aes(x = year, y = cinc1, group = as.factor(country_1))) +
  geom_line(aes(color = country_1)) +
  geom_line(aes(color = country_1), size = 2, alpha = 0.8) + 
  scale_color_manual(values =  pal) +
  bbplot::bbc_style()

In PART 3, we will merge together our data with our variables from PART 1, look at some descriptive statistics and run some panel data regression analysis with our different variables!

Check linear regression residuals are normally distributed with olsrr package in R.

Packages we will need:

library(olsrr)

One core assumption of linear regression analysis is that the residuals of the regression are normally distributed.

When the normality assumption is violated, interpretation and inferences may not be reliable or not at all valid.

So it is important we check this assumption is not violated.

As well residuals being normal distributed, we must also check that the residuals have the same variance (i.e. homoskedasticity). Click here to find out how to check for homoskedasticity and then if there is a problem with the variance, click here to find out how to fix heteroskedasticity (which means the residuals have a non-random pattern in their variance) with the sandwich package in R.

There are three ways to check that the error in our linear regression has a normal distribution (checking for the normality assumption):

  • plots or graphs such histograms, boxplots or Q-Q-plots,
  • examining skewness and kurtosis indices
  • formal normality tests.

So let’s start with a model. I will try to model what factors determine a country’s propensity to engage in war in 1995. The factors I throw in are the number of conflicts occurring in bordering states around the country (bordering_mid), the democracy score of the country and the military expediture budget of the country, logged (exp_log).

summary(war_model <- lm(mid_propensity ~ bordering_mid + democracy_score + exp_log, data = military))
stargazer(war_model, type = "text")

So now we have our simple model, we can check whether the regression is normally distributed. Insert the model into the following function. This will print out four formal tests that run all the complicated statistical tests for us in one step!

ols_test_normality(war_model)

Luckily, in this model, the p-value for all the tests (except for the Kolmogorov-Smirnov, which is juuust on the border) is less than 0.05, so we can reject the null that the errors are not normally distributed. Good to see.

Which of the normality tests is the best?

A paper by Razali and Wah (2011) tested all these formal normality tests with 10,000 Monte Carlo simulation of sample data generated from alternative distributions that follow symmetric and asymmetric distributions.

Their results showed that the Shapiro-Wilk test is the most powerful normality test, followed by Anderson-Darling test, and Kolmogorov-Smirnov test. Their study did not look at the Cramer-Von Mises test. These

The results of this study echo the previous findings of Mendes and Pala (2003) and Keskin (2006) in support of Shapiro-Wilk test as the most powerful normality test.

However, they emphasised that the power of all four tests is still low for small sample size. The common threshold is any sample below thirty observations.

We can visually check the residuals with a Residual vs Fitted Values plot.

plot(war_model)

To interpret, we look to see how straight the red line is. With our war model, it deviates quite a bit but it is not too extreme.

The Q-Q plot shows the residuals are mostly along the diagonal line, but it deviates a little near the top. Generally, it will

So out model has relatively normally distributed model, so we can trust the regression model results without much concern!

References

Razali, N. M., & Wah, Y. B. (2011). Power comparisons of shapiro-wilk, kolmogorov-smirnov, lilliefors and anderson-darling tests. Journal of statistical modeling and analytics2(1), 21-33.

Check for multicollinearity with the car package in R

Packages we will need:

install.packages("car")
library(car)

When one independent variable is highly correlated with another independent variable (or with a combination of independent variables), the marginal contribution of that independent variable is influenced by other predictor variables in the model.

And so, as a result:

  • Estimates for regression coefficients of the independent variables can be unreliable.
  • Tests of significance for regression coefficients can be misleading.

To check for multicollinearity problem in our model, we need the vif() function from the car package in R. VIF stands for variance inflation factor. It measures how much the variance of any one of the coefficients is inflated due to multicollinearity in the overall model.

As a rule of thumb, a vif score over 5 is a problem. A score over 10 should be remedied and you should consider dropping the problematic variable from the regression model or creating an index of all the closely related variables.

This blog post will look only at the VIF score. Click here to look at how to interpret various other multicollinearity tests in the mctest package in addition to the the VIF score.

Back to our model, I want to know whether countries with high levels of clientelism, high levels of vote buying and low democracy scores lead to executive embezzlement?

So I fit a simple linear regression model (and look at the output with the stargazer package)

summary(embezzlement_model_1 <- lm(executive_embezzlement ~ clientelism_index + vote_buying_score + democracy_score, data = data_2010))

stargazer(embezzlement_model_1, type = "text")

I suspect that clientelism and vote buying variables will be highly correlated. So let’s run a test of multicollinearity to see if there is any problems.

car::vif(embezzlement_model_1)

The VIF score for the three independent variables are :

Both clientelism index and vote buying variables are both very high and the best remedy is to remove one of them from the regression. Since vote buying is considered one aspect of clientelist regime so it is probably overlapping with some of the variance in the embezzlement score that the clientelism index is already explaining in the model

So re-run the regression without the vote buying variable.

summary(embezzlement_model_2 <- lm(v2exembez ~ v2xnp_client  + v2x_api, data = vdem2010))
stargazer(embezzlement_model_2, embezzlement_model_2, type = "text")
car::vif(embezzlement_mode2)

Comparing the two regressions:

And running a VIF test on the second model without the vote buying variable:

car::vif(embezzlement_model_2)

These scores are far below 5 so there is no longer any big problem of multicollinearity in the second model.

Click here to quickly add VIF scores to our regression output table in R with jtools package.

Plus, looking at the adjusted R2, which compares two models, we see that the difference is very small, so we did not lose much predictive power in dropping a variable. Rather we have minimised the issue of highly correlated independent variables and thus an inability to tease out the real relationships with our dependent variable of interest.

tl;dr: As a rule of thumb, a vif score over 5 is a problem. A score over 10 should be remedied (and you should consider dropping the problematic variable from the regression model or creating an index of all the closely related variables).

Click here to run stepwise regression analysis to help decide which problematic variables we can drop from our model (based on AIC scores)

Correct for heteroskedasticity in OLS with sandwich package in R

Packages we will need:

library(sandwich)
library(stargazer)
library(lmtest)

If our OLS model demonstrates high level of heteroskedasticity (i.e. when the error term of our model is not randomly distributed across observations and there is a discernible pattern in the error variance), we run into problems.

Why? Because this means OLS will use sub-optimalĀ estimators based on incorrect assumptions and the standard errors computed using these flawed least square estimators are more likely to be under-valued.

Since standard errors are necessary to compute our t – statistic and arrive at our p – value, these inaccurate standard errors are a problem.

Click here to check for heteroskedasticity in your model with the lmtest package.

To correct for heteroskedastcity in your model, you need the sandwich package and the lmtest package to employ the vcocHC argument.

Gordon Ramsey Idiot GIF - Find & Share on GIPHY

First, let’s fit a simple OLS regression.

summary(free_express_model <- lm(freedom_expression ~ free_elections + deliberative_index, data = data_1990))

We can see that there is a small star beside the main dependent variable of interest! Success!

Happy So Excited GIF - Find & Share on GIPHY

We have significance.

Thus, we could say that the more free and fair the elections a country has, this increases the mean freedom of expression index score for that country.

This ties in with a very minimalist understanding of democracy. If a country has elections and the populace can voice their choice of leadership, this will help set the scene for a more open society.

However, it is naive to look only at the p – value of any given coefficient in a regression output. If we run some diagnostic analyses and look at the relationship graphically, we may need to re-examine this seemingly significant relationship.

Can we trust the 0.087 standard error score that our OLS regression calculated? Is it based on sound assumptions?

Worried Its Always Sunny In Philadelphia GIF by HULU - Find & Share on GIPHY

First let’s look at the residuals. Can we assume that the variance of error is equal across all observations?

If we examine the residuals (the first graph), we see that there is actually a tapered fan-like pattern in the error variance. As we move across the x axis, the variance along the y axis gets continually smaller and smaller.

The error does not look random.

Panicking Oh No GIF by HULU - Find & Share on GIPHY

Let’s run a Breush-Pagan test (from the lmtest package) to check our suspicion of heteroskedasticity.

lmtest::bptest(free_exp_model)

We can reject the null hypothesis that the error variance is homoskedastic.

So the model does suffer from heteroskedasticty. We cannot trust those stars in the regression output!

Season 1 Omg GIF by Friends - Find & Share on GIPHY

In order to fix this and make our p-values more accuarate, we need to install the sandwich package to feed in the vcovHC adjustment into the coeftest() function.

vcovHC stands for variance covariance Heteroskedasticity Consistent.

With the stargazer package (which prints out all the models in one table), we can compare the free_exp_model alone with no adjustment, then four different variations of the vcovHC adjustment using different formulae (as indicated in the type argument below).

stargazer(free_exp_model,
          coeftest(free_exp_model, vcovHC(free_exp_model, type = "HC0")),
          coeftest(free_exp_model, vcovHC(free_exp_model, type = "HC1")),
          coeftest(free_exp_model, vcovHC(free_exp_model, type = "HC2")),
          coeftest(free_exp_model, vcovHC(free_exp_model, type = "HC3")),
          type = "text")

Looking at the standard error in the (brackets) across the OLS and the coeftest models, we can see that the standard error are all almost double the standard error from the original OLS regression.

There is a tiny difference between the different types of Heteroskedastic Consistent (HC) types.

The significant p – value disappears from the free and fair election variable when we correct with the vcovHC correction.

Season 2 Friends GIF - Find & Share on GIPHY

The actual coefficient stays the same regardless of whether we use no correction or any one of the correction arguments.

Which HC estimator should I use in my vcovHC() function?

The default in the sandwich package is HC3.

STATA users will be familiar with HC1, as it is the default robust standard error correction when you add robust at the end of the regression command.

The difference between them is not very large.

The estimator HC0 was suggested in the econometrics literature by White in 1980 and is justified by asymptotic arguments.

For small sample sizes, the standard errors from HC0 are quite biased, usually downward, and this results in overly liberal inferences in regression models (Bera, Suprayitno & Premaratne, 2002). But with HC0, the bias shrinks as your sample size increases.

The estimator types HC1, HC2 and HC3 were put forward by MacKinnon and White (1985) to improve the performance in small samples.

Long and Ervin (2000) furthermore argue that HC3 provides the best performance in small samples as it gives less weight to influential observations in the model

In our freedom of expression regression, the HC3 estimate was the most conservative with the standard error calculations. however the difference between the approaches did not change the conclusion; ultimately the main independent variable of interest in this analysis – free and fair elections – can explain variance in the dependent variable – freedom of expression – does not find evidence in the model.

Click here to read an article by Hayes and Cai (2007) which discusses the matrix formulae and empirical differences between the different calculation approaches taken by the different types. Unfortunately it is all ancient Greek to me.

References

Bera, A. K., Suprayitno, T., & Premaratne, G. (2002). On some heteroskedasticity-robust estimators of varianceā€“covariance matrix of the least-squares estimators. Journal of Statistical Planning and Inference108(1-2), 121-136.

Hayes, A. F., & Cai, L. (2007). Using heteroskedasticity-consistent standard error estimators in OLS regression: An introduction and software implementation. Behavior research methods39(4), 709-722.

Long, J. S., & Ervin, L. H. (2000). Using heteroscedasticity consistent standard errors in the linear regression model. The American Statistician54(3), 217-224.

MacKinnon, J. G., & White, H. (1985). Some heteroskedasticity-consistent covariance matrix estimators with improved finite sample properties. Journal of econometrics29(3), 305-325.