EconStor >
Georg-August-Universität Göttingen >
cege - Centrum für Europa-, Governance- und Entwicklungsforschung, Universität Göttingen >
cege-Diskussionspapiere, Universität Göttingen >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/32026
  
Title:The log of gravity revisited
Authors:Martínez-Zarzoso, Inmaculada
Nowak-Lehmann D., Felicitas
Vollmer, Sebastian
Issue Date:2007
Series/Report no.:CeGE Discussion Paper 64
Abstract:This paper evaluates the performance of alternative estimation methods for multiplicative and log models with heteroskedasticity. Contrary to Santos Silva and Tenreyro (2006), the results of a simulation study indicate that the Pseudo Poisson Maximum Likelihood estimator (PPML) is not always the best estimator. New estimates of the gravity equation are obtained for three different datasets with traditional methods (OLS and FGLS) and with the PPML. We find that the PPML assumption concerning the pattern of heteroskedasticity is, in most cases, rejected by the data and PPML estimates are outperformed by OLS and FGLS estimates in out-of-sample forecast.
Subjects:simulations
Poisson regression
constant-elasticity models
heteroskedasticity
feasible generalized least squares (FGLS)
maximum likelihood
JEL:C33
Q25
Document Type:Working Paper
Appears in Collections:cege-Diskussionspapiere, Universität Göttingen

Files in This Item:

There are no files associated with this item.

The document was removed on behalf of the author(s)/ the editor(s) on: November 15, 2010
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/32026

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.