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Support Vector Regression and Artificial Neural Network Approaches: Case of Economic Growth in East Africa Community

Received: 1 September 2017     Accepted: 18 September 2017     Published: 16 March 2018
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Abstract

There has been increased interest of late on the application of nonlinear methods to economic and financial data due to their robustness in handling large and complex data. With increasingly complex ‘big data’, focus has shifted into use of robust techniques in analysis of data. Various nonlinear approaches have so far been established including support vector machine which is widely adapted in classification and regression problems. This research project applied support vector regression technique and neural network models in modeling and forecasting economic growth for the five countries in the East Africa Community including Kenya, Uganda, United Republic of Tanzania, Rwanda and Burundi. Data for the period 1990 to 2014 from World Bank databases was used for the research. Support vector model and neural network models were trained using the data for the 1990-2002 whereas the remaining data was used for prediction performance to determine the robustness of the two models on external datasets. The study revealed that specific country models had better performance compared to the combined model and that although the two models compared similarly under specific-country models, the neural network performed better in most countries. The study recommends the use of the two machine learning techniques in economic growth modeling. It also recommends that the performance be compared with the traditional econometric models but using countries with more data periods.

Published in American Journal of Theoretical and Applied Statistics (Volume 7, Issue 2)
DOI 10.11648/j.ajtas.20180702.13
Page(s) 67-79
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

Support Vector Regression, Artificial Neural Network, Machine Learning, Economic Growth, East Africa, Economic Data

References
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    Abraham Kipkosgei Lagat, Anthony Gichuhi Waititu, Anthony Kibera Wanjoya. (2018). Support Vector Regression and Artificial Neural Network Approaches: Case of Economic Growth in East Africa Community. American Journal of Theoretical and Applied Statistics, 7(2), 67-79. https://doi.org/10.11648/j.ajtas.20180702.13

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    ACS Style

    Abraham Kipkosgei Lagat; Anthony Gichuhi Waititu; Anthony Kibera Wanjoya. Support Vector Regression and Artificial Neural Network Approaches: Case of Economic Growth in East Africa Community. Am. J. Theor. Appl. Stat. 2018, 7(2), 67-79. doi: 10.11648/j.ajtas.20180702.13

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    AMA Style

    Abraham Kipkosgei Lagat, Anthony Gichuhi Waititu, Anthony Kibera Wanjoya. Support Vector Regression and Artificial Neural Network Approaches: Case of Economic Growth in East Africa Community. Am J Theor Appl Stat. 2018;7(2):67-79. doi: 10.11648/j.ajtas.20180702.13

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  • @article{10.11648/j.ajtas.20180702.13,
      author = {Abraham Kipkosgei Lagat and Anthony Gichuhi Waititu and Anthony Kibera Wanjoya},
      title = {Support Vector Regression and Artificial Neural Network Approaches: Case of Economic Growth in East Africa Community},
      journal = {American Journal of Theoretical and Applied Statistics},
      volume = {7},
      number = {2},
      pages = {67-79},
      doi = {10.11648/j.ajtas.20180702.13},
      url = {https://doi.org/10.11648/j.ajtas.20180702.13},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtas.20180702.13},
      abstract = {There has been increased interest of late on the application of nonlinear methods to economic and financial data due to their robustness in handling large and complex data. With increasingly complex ‘big data’, focus has shifted into use of robust techniques in analysis of data. Various nonlinear approaches have so far been established including support vector machine which is widely adapted in classification and regression problems. This research project applied support vector regression technique and neural network models in modeling and forecasting economic growth for the five countries in the East Africa Community including Kenya, Uganda, United Republic of Tanzania, Rwanda and Burundi. Data for the period 1990 to 2014 from World Bank databases was used for the research. Support vector model and neural network models were trained using the data for the 1990-2002 whereas the remaining data was used for prediction performance to determine the robustness of the two models on external datasets. The study revealed that specific country models had better performance compared to the combined model and that although the two models compared similarly under specific-country models, the neural network performed better in most countries. The study recommends the use of the two machine learning techniques in economic growth modeling. It also recommends that the performance be compared with the traditional econometric models but using countries with more data periods.},
     year = {2018}
    }
    

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    AU  - Abraham Kipkosgei Lagat
    AU  - Anthony Gichuhi Waititu
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    AB  - There has been increased interest of late on the application of nonlinear methods to economic and financial data due to their robustness in handling large and complex data. With increasingly complex ‘big data’, focus has shifted into use of robust techniques in analysis of data. Various nonlinear approaches have so far been established including support vector machine which is widely adapted in classification and regression problems. This research project applied support vector regression technique and neural network models in modeling and forecasting economic growth for the five countries in the East Africa Community including Kenya, Uganda, United Republic of Tanzania, Rwanda and Burundi. Data for the period 1990 to 2014 from World Bank databases was used for the research. Support vector model and neural network models were trained using the data for the 1990-2002 whereas the remaining data was used for prediction performance to determine the robustness of the two models on external datasets. The study revealed that specific country models had better performance compared to the combined model and that although the two models compared similarly under specific-country models, the neural network performed better in most countries. The study recommends the use of the two machine learning techniques in economic growth modeling. It also recommends that the performance be compared with the traditional econometric models but using countries with more data periods.
    VL  - 7
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Author Information
  • Department of Basic and Applied Science, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya

  • Department of Basic and Applied Science, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya

  • Department of Basic and Applied Science, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya

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