Unlocking Rural Innovation
In the midst of a global slowdown in productivity, unlocking the innovative potential of rural places is more important than ever. As part of a series on supporting to help rural areas thrive, this thematic report provides the latest analysis and research on rural innovation, and proposes ways to overcome the growing gaps between rural and urban places that are contributing to the geographies of discontent. It first explores the multi-facetted innovative practices that are already occurring in rural places, and proposes alternative indicators beyond the traditional science and technology measures to capture them. Then, it identifies policy drivers and bottlenecks to help rural entrepreneurs, firms and people fully mobilise their growth potential. Results and recommendations are drawn from research and fact-finding missions from select OECD member countries.
Understanding explained and unexplained differences between two groups through a counter-factual exercise: The Oaxaca- Blinder decomposition
In the early 1970s, Oaxaca and Blinder popularised a framework for decomposing differences between two groups attributed to observable and non-observable characteristics. A typical application of the model is the creation of a counterfactual that divides any observed gap between two exclusive sub-groups into components that are observed as characteristics of individuals and a component that contributes to the difference in the structure of outcome variables (Fortin, Lemieux and Firpo, 2011[1]). Since then, the Oaxaca-Blinder decomposition has been one of the most widely used models for understanding what may be attributed to observable and non-observable characteristics between two groups. A simplified version of their model decomposes intergroup differences in two parts. The decomposition aims to understand what part of the differences in the mean outcomes of each group: R=EYa-E(Yb) where Y are expected outcome variables for groups a and b.
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