Trade is a good gauge of economic activity. Given the economic and geographical attributes of a place, one can assess the likely levels of trading activity, and this may be used as an indicator of the relative economic potential among the areas. However, trade estimates are available only at the regional level of disaggregation, despite the fact that planning by local governments and even by line agencies of the central government happens mostly at the sub-regional level. In this research, we fill this data gap by estimating trade at town or city level via a gravity model of trade. Normally sub-regional trade is estimated using Ordinary Least Regression, but this research uses Poisson Regression which is better at handling zero trade values without transformation. The research results have been applied by a number of government agencies in their respective programs

Beronilla, Nikkin; Esguerra, Patrocinio Jude; Ocampo, Jamir

Trade is a good gauge of economic activity. Given the economic and geographical attributes of a place, one can assess the likely levels of trading activity, and this may be used as an indicator of the relative economic potential among the areas. However, trade estimates are available only at the regional level of disaggregation, despite the fact that planning by local governments and even by line agencies of the central government happens mostly at the sub-regional level. In this research, we fill this data gap by estimating trade at town or city level via a gravity model of trade. Normally sub-regional trade is estimated using Ordinary Least Regression, but this research uses Poisson Regression which is better at handling zero trade values without transformation. The research results have been applied by a number of government agencies in their respective programs

Nikkin Beronilla, Patrocinio Jude Esguerra and Jamir Ocampo
Additional contact information
Nikkin Beronilla: National Anti-Poverty Commission
Patrocinio Jude Esguerra: National Anti-Poverty Commission
Jamir Ocampo: National Anti-Poverty Commission

Philippine Review of Economics, 2016, vol. 53, issue 1, 87-96

Keywords: gravity model of trade; Poisson regression; economic potential for growth (search for similar items in EconPapers)
JEL-codes: C01 F17 (search for similar items in EconPapers)
Date: 2016
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