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Quantiles, corners, and the extensive margin of trade

Author

Listed:
  • Machado, José A.F.
  • Santos Silva, J.M.C.
  • Wei, Kehai

Abstract

We develop a simple method for the estimation of quantile regressions for corner solutions data (i.e., fully observed non-negative data that have a mixed distribution with a mass-point at zero), focussing particular attention on the case where the domain of the variate of interest is bounded both from below and from above. We use the proposed method to study the determinants of the extensive margin of trade and find that most regressors have very different impacts on different parts of the distribution.

Suggested Citation

  • Machado, José A.F. & Santos Silva, J.M.C. & Wei, Kehai, 2016. "Quantiles, corners, and the extensive margin of trade," European Economic Review, Elsevier, vol. 89(C), pages 73-84.
    • Handle: RePEc:eee:eecrev:v:89:y:2016:i:c:p:73-84
    DOI: 10.1016/j.euroecorev.2016.05.011
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    More about this item

    Keywords

    BFGS algorithm; Corner solutions; Local bandwidth; Non-linear quantile regression;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C29 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Other
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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