☆ 4.4 Article

Bias in Poisson Pseudo-Maximum Likelihood estimation of structural gravity models: how much of a problem for applied research?

APPLIED ECONOMICS LETTERS (2023)

The Log of Gravity at 15

J. M. C. Santos Silva et al.

Summary: We review the contribution of The Log of Gravity (Santos Silva and Tenreyro, 2006), summarize the main results in the ensuing literature, and provide a brief review of the state-of-the-art in the estimation of gravity equations and other constant-elasticity models.

PORTUGUESE ECONOMIC JOURNAL (2022)

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Article Economics

Bias and consistency in three-way gravity models

Martin Weidner et al.

Summary: This study examines the incidental parameter problem for the three-way Poisson Pseudo-Maximum Likelihood (PPML) estimator in fixed-T settings, confirming its consistency while noting biases in confidence intervals and variance estimates. Practical remedies are proposed to improve the reliability of inferences in trade policies and time-varying gravity variables.

JOURNAL OF INTERNATIONAL ECONOMICS (2021)

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Article Economics