Bimodality & the performance of PPML

Sören Prehn and Bernhard Brümmer

No 1202, DARE Discussion Papers from Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE)

Abstract: There has been an extensive discussion on the applicability of Poisson Pseudo Maximum Likelihood (PPML) to trade. Here, we are going to analyse again the performance of PPML but in the light of a bimodal distribution; in addition, we also explicitly account for excess zeros. Simulations are based on a Bernoulli-Gamma distribution (a zero-inflated Gamma distribution). Again, our results are a confirmation of how well-behaved PPML is in general.

Keywords: Poisson Pseudo Maximum Likelihood; excess zeros; zero-inflated Gamma Distribution; simulation (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-ecm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:daredp:1202

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