Latent unbalancedness in three-way gravity models

Daniel Czarnowske and Amrei Stammann

Economics Letters, 2022, vol. 220, issue C

Abstract: Many panel data sets used for Pseudo-Poisson estimation of three-way gravity models are implicitly unbalanced because uninformative observations are redundant for the estimation. We show with real data as well as simulations that this phenomenon, which we call latent unbalancedness, amplifies the inference problem recently studied by Weidner and Zylkin (2021).

Keywords: Asymptotic bias correction; Complete separation; Fixed effects; Pseudo-Poisson maximum likelihood (search for similar items in EconPapers)
JEL-codes: C13 C23 C50 F10 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:220:y:2022:i:c:s0165176522003354

DOI: 10.1016/j.econlet.2022.110861

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