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Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator

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  • Santos Silva, J.M.C.
  • Tenreyro, Silvana

Abstract

We extend the simulation results in Santos Silva and Tenreyro (2006, The log of gravity, The Review of Economics and Statistics, 88, 641-658) by considering a novel data-generating process. Our results confirm that the Poisson pseudo-maximum likelihood estimator is generally well behaved, even when the proportion of zeros in the sample is very large.

Suggested Citation

  • Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
  • Handle: RePEc:eee:ecolet:v:112:y:2011:i:2:p:220-222
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    1. 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.
    2. Dr Alex Bryson, 2009. "Employee Voice and Private Sector Workplace Outcomes in Britain, 1980-2004," National Institute of Economic and Social Research (NIESR) Discussion Papers 329, National Institute of Economic and Social Research.
    3. Eaton Jonathan & Tamura Akiko, 1994. "Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns," Journal of the Japanese and International Economies, Elsevier, vol. 8(4), pages 478-510, December.
    4. Jeffrey A. Frankel, 1997. "Regional Trading Blocs in the World Economic System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 72, January.
    5. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    6. Martínez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas & Vollmer, Sebastian, 2007. "The log of gravity revisited," Center for European, Governance and Economic Development Research Discussion Papers 64, University of Goettingen, Department of Economics.
    7. Manning, Willard G. & Mullahy, John, 2001. "Estimating log models: to transform or not to transform?," Journal of Health Economics, Elsevier, vol. 20(4), pages 461-494, July.
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    More about this item

    Keywords

    Finite mixtures Gravity equation International trade Zeros;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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