English, Article edition: On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-inflated Estimation Martijn Burger; Frank van Oort; Gert-Jan Linders

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/50413
Physical Description
  • article
Language
  • English

Edition details

Title
  • On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-inflated Estimation
Author
  • Martijn Burger
  • Frank van Oort
  • Gert-Jan Linders
Physical Description
  • article
Notes
  • Conventional studies of bilateral trade patterns specify a log-normal gravity equation for empirical estimation. However, the log-normal gravity equation suffers from three problems: the bias created by the logarithmic transformation, the failure of the homoskedasticity assumption, and the way zero values are treated. These problems normally result in biased and inefficient estimates. Recently, the Poisson specification of the trade gravity model has received attention as an alternative to the log-normality assumption (Santos Silva &​ Tenreyro, 2006). However, the standard Poisson model is vulnerable for problems of overdispersion and excess zero flows. To overcome these problems, this paper considers modified Poisson fixed-effects estimations (negative binomial, zero-inflated). Extending the empirical model put forward by Santos Silva &​ Tenreyro (2006), we show how these techniques may provide viable alternatives to both the log-normal and standard Poisson specification of the gravity model of trade. Caracteristiques du modele de gravite du commerce: zeros, zeros en exces et estimation du zero-inflated Resume Des etudes conventionnelles sur la structure des echanges commerciaux bilateraux definissent une equation de gravite log-normale pour estimation empirique. Cependant, l'equation de gravite log-normale souffre de trois problemes: le biais cree par la transformation logarithmique, l'echec de l'hypothese d'homoscedasticite, et la maniere dont sont traitees les valeurs zero. Ces problemes conduisent en general a des estimations biaisees et inefficaces. La specification de Poisson du modele de gravite du commerce a recemment retenu l'attention en tant qu'alternative a l'hypothese de log-normalite (Santos Silva et Tenreyro, 2006). Toutefois, le modele standard de Poisson est vulnerable en ce qui concerne les problemes d'hyperdispersion et de flux d'exces en zero. Afin de surmonter ces problemes, cet article considere des estimations de Poisson modifiees a effets fixes (binomiale negative, zero-inflated). En elargissant ce modele empirique rapporte par Santos Silva et Tenreyro (2006), nous demontrons que ces techniques peuvent apporter des methodes alternatives viables a la specification log-normale, ainsi qu'a la specification Poisson standard du modele de gravite du commerce. Sobre la especificacion del modelo de gravedad del comercio: estimaciones cero, cero en exceso y cero infladas Resumen Los estudios convencionales de patrones de comercio bilateral especifican una ecuacion de gravedad log-normal para la estimacion empirica. No obstante, la ecuacion de gravedad log-normal tiene tres problemas: el sesgo creado por la transformacion logaritmica, el fracaso de la suposicion de homocedasticidad, y la forma en que se tratan los valores cero. Estos problemas generalmente arrojan estimaciones sesgadas e ineficientes. Recientemente, la especificacion Poisson del modelo de gravedad del comercio ha recibido atencion como una alternativa a la suposicion de log-normalidad (Santos Silva y Tenreyro, 2006). Sin embargo, el modelo Poisson estandar es vulnerable por problemas de sobredispersion y exceso de flujos cero. Para superar estos problemas, este estudio considera las estimaciones modificadas Poisson de efecto fijo (binomial negativa, cero-infladas). Al extender el modelo empirico propuesto por Santos Silva y Tenreyro (2006), mostramos que estas tecnicas pueden proporcionar alternativas viables para especificaciones log-normal y Poisson estandar del modelo de gravedad del comercio. [image omitted]
  • International trade, distance, gravity model, modified Poisson models,
  • RePEc:taf:specan:v:4:y:2009:i:2:p:167-190
Language
  • English
Contributed by
OAIster

Get this edition

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment