The estimation and interpretation of coefficients in panel gravity models of migration
Michael Cameron () and
Letters in Spatial and Resource Sciences, 2019, vol. 12, issue 1, No 2, 9-15
Abstract In this paper, we demonstrate that the conventional ordinary least squares and fixed effects estimators of classical gravity models of migration are biased, and that the interpretation of coefficients in the fixed effects gravity model is typically incorrect. We then present a best linear unbiased (BLU) estimator for gravity models of migration, and illustrate its application with inter-regional data from New Zealand. The results demonstrate that the standard ordinary least squares and fixed effect models lead to biased coefficients on population. Alternative estimates that are BLU are provided for a data generating process with fixed origin and destination effects. The coefficients on population must be interpreted in this model as growth rate effects rather than level effects. Our findings also have significance for other types of spatial interaction modelling.
Keywords: Gross migration flows; Gravity model; Fixed effects; New Zealand (search for similar items in EconPapers)
JEL-codes: O15 R23 (search for similar items in EconPapers)
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Working Paper: The Estimation and Interpretation of Coefficients in Panel Gravity Models of Migration (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lsprsc:v:12:y:2019:i:1:d:10.1007_s12076-018-00220-y
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