Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/50550
Authors: 
Prehn, Sören
Brümmer, Bernhard
Year of Publication: 
2011
Series/Report no.: 
Diskussionspapiere // Department für Agrarökonomie und Rurale Entwicklung 1107
Abstract: 
French (2011) can analytically show that the standard Anderson and van Wincoop (2003) gravity trade model is only correctly specified for disaggregate data; gravity trade model analysis should be done at product level and then estimation results should be reaggregated. If however gravity trade model analysis is to be done at product level then also estimation issues in disaggregate gravity trade models should come to the fore. As is shown, previous estimators suffer under different statistical problems. This paper proposes a zero-in ated Poisson Quasi-Likelihood (PQL) and a Gamma Two-Part Model (G2PM) as reliable alternatives. Estimated within a Generalised Estimating Equation (GEE) framework, both estimators are consistent and have more or less conservative test statistics. Further, for model selection a Quasi-Likelihood under the Independence Model Criterion (QIC) is recommend since this statistic is conform with GEE approaches. Both estimators PQL and G2PM and the model selection technique QIC should become standard tools for disaggregate gravity trade model estimation.
Subjects: 
gravity model
excess zeros
Poisson Quasi-Likelihood
Gamma Two-Part Model
Generalised Estimating Equation Approach
Document Type: 
Working Paper

Files in This Item:
File
Size
775.41 kB





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