Estimating the Gravity Model When Zero Trade Flows are Frequent and Economically Determined

This paper evaluates the performance of alternative estimators of the gravity equation when zero trade flows result from economically-based data-generating processes with heteroscedastic residuals and potentially-omitted variables. In a standard Mo...

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Bibliographic Details
Main Authors:	Martin, Will, Pham, Cong S.
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	PANEL DATA VARIABILITY REGRESSION MODEL MINIMIZATION ERRORS BINOMIAL DISTRIBUTION COEFFICIENTS LIMITED DEPENDENT VARIABLE NORMAL DISTRIBUTION DUMMY VARIABLES GDP PER CAPITA INFORMATION LINEAR FUNCTION EXPORTS ELASTICITY TRADE FLOWS LOGARITHMS DISTRIBUTION GRAVITY MODEL VARIABLES DEGREES OF FREEDOM ECONOMETRIC METHODS NONLINEARITY EXOGENOUS REGRESSORS NONLINEAR MODELS DUMMY VARIABLE NUMBER OF OBSERVATIONS PROBABILITIES PREFERENTIAL ACCESS INDEPENDENT VARIABLES CLASSIFICATIONS VARIABLE ESTIMATION KNOWLEDGE EMPIRICAL ANALYSIS BIASES MONTE CARLO SIMULATION GOODNESS OF FIT STANDARD DEVIATION DATA MAXIMUM LIKELIHOOD STEP ESTIMATOR LAY OUT EXOGENOUS VARIABLES TRADE BLOCS DECISION TREE PROBABILITY NOTATION LINEAR MODELS ECONOMETRICS CLUSTERING STANDARD ERRORS CASES CRITERIA LINEAR PROBABILITY MATRIX EXPLANATORY VARIABLES POSITIVE OBSERVATIONS ACCESS INDICATORS RESEARCH ARTICLE LIKELIHOOD FUNCTION ECONOMETRIC PROBLEMS LARGE NUMBER VOLUME OF TRADE RANDOM VARIABLES GRAVITY EQUATION ECONOMIC RESEARCH ERROR VARIANCE SELECTION MODEL LIMITED DEPENDENT VARIABLES MODEL RESULTS ECONOMIC SURVEYS INTERNATIONAL TRADE ECONOMETRIC ANALYSIS VALIDITY DESCRIPTION VALUE DEPENDENT VARIABLE POISSON DISTRIBUTION DISTRIBUTION FUNCTION LIKELIHOOD RATIO ERROR TERMS GAMMA DISTRIBUTION INDEX COEFFICIENT VECTOR EXPECTED VALUE DEPENDENT VARIABLES RESEARCHERS AGRICULTURE CORRELATION EQUATIONS STANDARD NORMAL DISTRIBUTION SAMPLES ERROR TERM MEASUREMENT ECONOMIC THEORY CONSTANT VARIANCE ASYMPTOTICALLY EQUIVALENT SURVEYS ECONOMICS ECONOMIC MODELS CASE LOG-LIKELIHOOD FUNCTION HETEROSCEDASTICITY INTEGER VALUES FIXED EFFECTS FUNCTIONAL FORMS JOURNAL OF ECONOMETRICS TRADE GDP THEORY BILATERAL TRADE STATISTICS EVALUATION STATA TRADE THEORIES PRECISION STANDARD ERROR WEBSITE SAMPLE SELECTION MAXIMUM LIKELIHOOD ESTIMATOR HOMOSCEDASTICITY LINEAR PROBABILITY MODEL RANDOM VARIABLE LINEAR REGRESSION ECONOMIC STATISTICS DEVELOPMENT POLICY
Online Access:	http://documents.worldbank.org/curated/en/2015/06/24641545/estimating-gravity-model-zero-trade-flows-frequent-economically-determined http://hdl.handle.net/10986/22182

Internet

http://documents.worldbank.org/curated/en/2015/06/24641545/estimating-gravity-model-zero-trade-flows-frequent-economically-determined
http://hdl.handle.net/10986/22182

Estimating the Gravity Model When Zero Trade Flows are Frequent and Economically Determined

Internet

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