IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v220y2022ics0165176522003354.html
   My bibliography  Save this article

Latent unbalancedness in three-way gravity models

Author

Listed:
  • Czarnowske, Daniel
  • Stammann, Amrei

Abstract

Many panel data sets used for Pseudo-Poisson estimation of three-way gravity models are implicitly unbalanced because uninformative observations are redundant for the estimation. We show with real data as well as simulations that this phenomenon, which we call latent unbalancedness, amplifies the inference problem recently studied by Weidner and Zylkin (2021).

Suggested Citation

  • Czarnowske, Daniel & Stammann, Amrei, 2022. "Latent unbalancedness in three-way gravity models," Economics Letters, Elsevier, vol. 220(C).
    • Handle: RePEc:eee:ecolet:v:220:y:2022:i:c:s0165176522003354
    DOI: 10.1016/j.econlet.2022.110861
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176522003354
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2022.110861?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Daniel Czarnowske & Amrei Stammann, 2019. "Fixed Effects Binary Choice Models: Estimation and Inference with Long Panels," Papers 1904.04217, arXiv.org, revised Oct 2020.
    2. Iván Fernández-Val & Martin Weidner, 2018. "Fixed Effects Estimation of Large-TPanel Data Models," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 109-138, August.
    3. Sergio Correia & Paulo Guimarães & Tom Zylkin, 2020. "Fast Poisson estimation with high-dimensional fixed effects," Stata Journal, StataCorp LP, vol. 20(1), pages 95-115, March.
    4. Santos Silva, J.M.C. & Tenreyro, Silvana, 2010. "On the existence of the maximum likelihood estimates in Poisson regression," Economics Letters, Elsevier, vol. 107(2), pages 310-312, May.
    5. Weidner, Martin & Zylkin, Thomas, 2021. "Bias and consistency in three-way gravity models," Journal of International Economics, Elsevier, vol. 132(C).
    6. Gourieroux, Christian & Monfort, Alain & Trognon, Alain, 1984. "Pseudo Maximum Likelihood Methods: Theory," Econometrica, Econometric Society, vol. 52(3), pages 681-700, May.
    7. Gourieroux, Christian & Monfort, Alain & Trognon, Alain, 1984. "Pseudo Maximum Likelihood Methods: Applications to Poisson Models," Econometrica, Econometric Society, vol. 52(3), pages 701-720, May.
    8. Sergio Correia & Paulo Guimar~aes & Thomas Zylkin, 2019. "Verifying the existence of maximum likelihood estimates for generalized linear models," Papers 1903.01633, arXiv.org, revised Jun 2021.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. J. M. C. Santos Silva & Silvana Tenreyro, 2022. "The Log of Gravity at 15," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(3), pages 423-437, September.
    2. Thomas Bolli & Guillaume Morlet, 2023. "Does human capital theory govern the relationship between training provision and the business cycle? Evidence from Switzerland," French Stata Users' Group Meetings 2023 26, Stata Users Group.
    3. Cohn, Jonathan B. & Liu, Zack & Wardlaw, Malcolm I., 2022. "Count (and count-like) data in finance," Journal of Financial Economics, Elsevier, vol. 146(2), pages 529-551.
    4. Holger Breinlich & Valentina Corradi & Nadia Rocha & Michele Ruta & Joao M.C. Santos Silva & Tom Zylkin, 2021. "Machine Learning in International Trade Research ?- Evaluating the Impact of Trade Agreements," School of Economics Discussion Papers 0521, School of Economics, University of Surrey.
    5. Unel, Bulent & Upton, Gregory B., 2023. "Oil & gas induced economic fluctuations and self-employment," Labour Economics, Elsevier, vol. 82(C).
    6. Joalane Rosina Tota & Denis Nfor Yuni, 2023. "Tax and International Trade in the SADC Region:A Panel Gravity Model Approach," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 24-44.
    7. Bucciol, Alessandro & Castagnetti, Alessandro, 2020. "Choking under pressure in archery," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 89(C).
    8. Liu, Ailan & Lu, Cuicui & Wang, Zhixuan, 2021. "Does cultural distance hinder exports?: A comparative study of China and the United States," Economic Modelling, Elsevier, vol. 105(C).
    9. Mello, Marco & Moscelli, Giuseppe, 2021. "Voting, Contagion and the Trade-Off between Public Health and Political Rights: Quasi-Experimental Evidence from the Italian 2020 Polls," IZA Discussion Papers 14658, Institute of Labor Economics (IZA).
    10. Claire Brunel & Thomas Zylkin, 2022. "Do cross‐border patents promote trade?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(1), pages 379-418, February.
    11. Koen Jochmans & Vincenzo Verardi, 2022. "Instrumental‐variable estimation of exponential‐regression models with two‐way fixed effects with an application to gravity equations," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(6), pages 1121-1137, September.
    12. Hinz, Julian & Stammann, Amrei & Wanner, Joschka, 2019. "Persistent zeros: The extensive margin of trade," Kiel Working Papers 2139, Kiel Institute for the World Economy (IfW Kiel).
    13. Anna D’Ambrosio & Sandro Montresor, 2022. "The pro-export effect of subnational migration networks: new evidence from Spanish provinces," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(1), pages 53-107, February.
    14. Carter, Colin A. & Steinbach, Sandro & Zhuang, Xiting, 2022. "Global Shipping Container Disruptions and U.S. Agricultural Exports," Working Papers 320397, International Agricultural Trade Research Consortium.
    15. Steinbach, Sandro, 2023. "The Corporatization of Veterinary Medicine: An Empirical Analysis of Its Impact on Independent Practices," 2023 Annual Meeting, July 23-25, Washington D.C. 335481, Agricultural and Applied Economics Association.
    16. Elina Bryngemark & Patrik Söderholm, 2022. "Green industrial policies and domestic production of biofuels: an econometric analysis of OECD countries," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(2), pages 225-261, April.
    17. Giuliani, Elisa & Martinelli, Arianna & Rabellotti, Roberta, 2016. "Is Co-Invention Expediting Technological Catch Up? A Study of Collaboration between Emerging Country Firms and EU Inventors," World Development, Elsevier, vol. 77(C), pages 192-205.
    18. Hallin, Marc & La Vecchia, Davide, 2020. "A Simple R-estimation method for semiparametric duration models," Journal of Econometrics, Elsevier, vol. 218(2), pages 736-749.
    19. Barone-Adesi, Giovanni & Fusari, Nicola & Mira, Antonietta & Sala, Carlo, 2020. "Option market trading activity and the estimation of the pricing kernel: A Bayesian approach," Journal of Econometrics, Elsevier, vol. 216(2), pages 430-449.
    20. Emilie Alberola & Julien Chevallier & Benoît Chèze, 2008. "The EU Emissions Trading Scheme : Disentangling the Effects of Industrial Production and CO2 Emissions on Carbon Prices," Working Papers hal-04140795, HAL.

    More about this item

    Keywords

    Asymptotic bias correction; Complete separation; Fixed effects; Pseudo-Poisson maximum likelihood;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • F10 - International Economics - - Trade - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:220:y:2022:i:c:s0165176522003354. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.