Estimates of Trade Costs using Gravity Equation in Mixed Effects Model

Eyup Dogan ()

Applied Economics and Finance, 2016, vol. 3, issue 2, 39-44

Abstract: By using a log-linear Taylor-series expansion to linearize the multilateral resistance terms, this study aims to estimate the theory-based gravity equation in mixed effects model to obtain not only unbiased and consistent but also efficient coefficient estimates of trade cost variables. We show that coefficient estimates of trade cost variables estimated using mixed effects model are close to those found by the existing literature; however, only those in this paper are efficient as a result of accounting for unobserved country heterogeneity and approximation errors.

Keywords: Trade Costs; Gravity Equation; Mixed Effects Model (search for similar items in EconPapers)
JEL-codes: C50 F10 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://redfame.com/journal/index.php/aef/article/view/1354/1341 (application/pdf)
http://redfame.com/journal/index.php/aef/article/view/1354 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rfa:aefjnl:v:3:y:2016:i:2:p:39-44

Access Statistics for this article

More articles in Applied Economics and Finance from Redfame publishing Contact information at EDIRC.
Bibliographic data for series maintained by Redfame publishing ().