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The Gravity Model: An Illustration Of Structural Estimation As Calibration

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Author Info
EDWARD J. BALISTRERI
RUSSELL H. HILLBERRY

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Abstract

"Dawkins, Srinivasan, and Whalley ("Calibration,""Handbook of Econometrics, "2001) propose that estimation is calibration. We illustrate their point by examining a leading econometric application in the study of international and interregional trade by Anderson and van Wincoop ("Gravity with Gravitas: A Solution to the Border Puzzle,""American Economic Review, "2003). We replicate the econometric process and show it to be a calibration of a general equilibrium model. Our approach offers unique insights into structural estimation, and we highlight the importance of traditional calibration considerations when one uses econometric techniques to calibrate a model for comparative policy analysis. "("JEL "F10, C13, C60) Copyright (c) 2007 Western Economic Association International.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1465-7295.2007.00093.x
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Publisher Info
Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 46 (2008)
Issue (Month): 4 (October)
Pages: 511-527
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Handle: RePEc:bla:ecinqu:v:46:y:2008:i:4:p:511-527

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