Estimation of structural gravity quantile regression models

Badi Baltagi and Peter Egger

Empirical Economics, 2016, vol. 50, issue 1, 5-15

Abstract: This paper demonstrates that observable trade cost measures in logs are not linearly related to the overall log trade costs nor to the conditional mean of log bilateral trade flows. This is shown using a simultaneous quantiles regression model and data on bilateral exports in 2008. This is modeled as a function of geographical, cultural, and historical observables and a host of unobservable trade cost measures in a structural model of bilateral trade. In this model, trade costs differ not only statistically but also quantitatively across the quantiles of the conditional distribution of bilateral exports. As a consequence, comparative static effects of these trade costs vary as well. Copyright Springer-Verlag Berlin Heidelberg 2016

Keywords: Gravity models; Quantile regression; Structural estimation; C14; C21; F14 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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DOI: 10.1007/s00181-015-0956-5

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