The Gravity Model for International Trade: Specification and Estimation Issues

Tamás Krisztin and Manfred Fischer

Spatial Economic Analysis, 2015, vol. 10, issue 4, 451-470

Abstract: The Poisson gravity model along with pseudo maximum likelihood (ML) methods has become a popular way to model international trade flows. This approach has several econometric advantages that we outline in the paper. We argue that estimating the parameters by ML would only be justified statistically if the trade flows were independent. Such an assumption, however, is generally not valid, and a failure to account for spatial dependence may lead to biased parameter estimates and misleading inferences. To overcome this estimation problem we suggest eigenvector spatial filtering variants of the Poisson gravity model (without and with zero-inflation) along with pseudo ML estimation.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Downloads: (external link)
http://hdl.handle.net/10.1080/17421772.2015.1076575 (text/html)
Access to full text is restricted to subscribers.

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:taf:specan:v:10:y:2015:i:4:p:451-470

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RSEA20

DOI: 10.1080/17421772.2015.1076575

Access Statistics for this article

Spatial Economic Analysis is currently edited by Bernie Fingleton and Danilo Igliori

More articles in Spatial Economic Analysis from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().