statistics Statistics (from German language, German: ', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. In applying statistics to a s ...

, a proxy or proxy variable is a variable that is not in itself directly relevant, but that serves in place of an unobservable or immeasurable variable. In order for a variable to be a good proxy, it must have a close

correlation In statistics, correlation or dependence is any statistical relationship, whether causal or not, between two random variables or bivariate data. Although in the broadest sense, "correlation" may indicate any type of association, in statistics ...

, not necessarily linear, with the variable of interest. This correlation might be either positive or negative. Proxy variable must relate to an unobserved variable, must correlate with disturbance, and must not correlate with regressors once the disturbance is controlled for.

Examples

social science Social science (often rendered in the plural as the social sciences) is one of the branches of science, devoted to the study of societies and the relationships among members within those societies. The term was formerly used to refer to the ...

s, proxy measurements are often required to stand in for variables that cannot be directly measured. This process of standing in is also known as

operationalization In research design, especially in psychology, social sciences, life sciences and physics, operationalization or operationalisation is a process of defining the measurement of a phenomenon which is not directly measurable, though its existence is ...

. Per-capita

gross domestic product Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performanc ...

(GDP) is often used as a proxy for measures of

standard of living Standard of living is the level of income, comforts and services available to an individual, community or society. A contributing factor to an individual's quality of life, standard of living is generally concerned with objective metrics outsid ...

quality of life Quality of life (QOL) is defined by the World Health Organization as "an individual's perception of their position in life in the context of the culture and value systems in which they live and in relation to their goals, expectations, standards ...

. Montgomery ''et al.'' examine several proxies used, and point out limitations with each, stating "In poor countries, no single empirical measure can be expected to display all of the facets of the concept of income. Our judgment is that consumption per adult is the best measure among those collected in cross-sectional surveys." Frost lists several examples of proxy variables:Jim Frost
Proxy Variables: The Good Twin of Confounding Variables
22 September 2011 (retrieved 9 Nov. 2015)

References

* * * Statistical analysis {{econometrics-stub

Examples

See also

References