Using CATPCA to evaluate market regulation

One of the most interesting and fast growing research area in economics concerns the measurement of relative competiveness of different economic systems. Among the several proposed indicators, a particularly relevant one is the Product Market Regulation (PMR) indicator proposed by the OECD, calculated on the basis of a uniquely rich database. This paper uses the same database and a similar framework to compute alternative indicators. The main difference with the OECD team indicators is that for most of the variables we propose a less invasive statistical methology, removing contemporaneously several arbitrary and ad hoc manipulations of basic data. The calculation delivered a new ranking of the 21 countries analized and some new rather interesting evidence. In particular we found that Italy is a very overegulated country, but not an outlier as in the OECD index.