Constrained Poisson pseudo maximum likelihood estimation of structural gravity models
Michael Pfaffermayr ()
International Economics, 2020, vol. 161, issue C, 188-198
This paper reconsiders the estimation of structural gravity models. It introduces a constrained, projection-based Poisson pseudo maximum likelihood estimation procedure (constrained PPML) that exploits the equilibrium conditions introduced by Anderson and Van Wincoop (2003) for estimation and inference. The constrained PPML estimator avoids the estimation of the large number of exporter and importer fixed effects, and provides more reliable inference than the unconstrained PPML estimator. Moreover, based on the delta method the paper drives confidence intervals of counterfactual changes. Monte Carlo simulations yield encouraging results on the performance of the constrained PPML estimator.
Keywords: Constrained Poisson pseudo maximum likelihood estimation; International trade gravity equation structural estimation (search for similar items in EconPapers)
JEL-codes: F10 F15 C13 C50 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:161:y:2020:i:c:p:188-198
Access Statistics for this article
International Economics is currently edited by Valerie Mignon and Marcelo Olarreaga
More articles in International Economics from Elsevier
Bibliographic data for series maintained by Haili He ().