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The estimation and interpretation of coefficients in panel gravity models of migration

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  • Michael P. Cameron

    (University of Waikato
    University of Waikato)

  • Jacques Poot

    (University of Waikato
    Vrije Universiteit Amsterdam)

Abstract

In this paper, we demonstrate that the conventional ordinary least squares and fixed effects estimators of classical gravity models of migration are biased, and that the interpretation of coefficients in the fixed effects gravity model is typically incorrect. We then present a best linear unbiased (BLU) estimator for gravity models of migration, and illustrate its application with inter-regional data from New Zealand. The results demonstrate that the standard ordinary least squares and fixed effect models lead to biased coefficients on population. Alternative estimates that are BLU are provided for a data generating process with fixed origin and destination effects. The coefficients on population must be interpreted in this model as growth rate effects rather than level effects. Our findings also have significance for other types of spatial interaction modelling.

Suggested Citation

  • Michael P. Cameron & Jacques Poot, 2019. "The estimation and interpretation of coefficients in panel gravity models of migration," Letters in Spatial and Resource Sciences, Springer, vol. 12(1), pages 9-15, April.
    • Handle: RePEc:spr:lsprsc:v:12:y:2019:i:1:d:10.1007_s12076-018-00220-y
    DOI: 10.1007/s12076-018-00220-y
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    1. Lewer, Joshua J. & Van den Berg, Hendrik, 2008. "A gravity model of immigration," Economics Letters, Elsevier, vol. 99(1), pages 164-167, April.
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    Cited by:

    1. Lucie Kurekova, 2022. "Regional migration and the dimension of distance in empirical analysis," International Journal of Economic Sciences, European Research Center, vol. 11(2), pages 80-91, November.
    2. Rosmaiza A. Ghani & Michael P. Cameron & William Cochrane & Matthew Roskruge, 2019. "A Gravity Model Estimation of the Bi-Directional Relationship between International Trade and Migration," Working Papers in Economics 19/02, University of Waikato.

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    More about this item

    Keywords

    Gross migration flows; Gravity model; Fixed effects; New Zealand;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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