Arbeitspapier
A Spatial-Filtering Zero-Inflated Approach to the Estimation of the Gravity Model of Trade
Nonlinear estimation of the gravity model with Poisson/negative binomial methods has become popular to model international trade flows, because it permits a better accounting for zero flows and extreme values in the distribution tail. Nevertheless, as trade flows are not independent from each other due to spatial autocorrelation, these methods may lead to biased parameter estimates. To overcome this problem, eigenvector spatial filtering variants of the Poisson/negative binomial specification have been proposed in the literature of gravity modelling of trade. However, no specific treatment has been developed for cases in which many zero flows are present. This paper contributes to the literature in two ways. First, by employing a stepwise selection criterion for spatial filters that is based on robust (sandwich) p-values and does not require likelihood-based indicators. In this respect, we develop an ad hoc backward stepwise function in R. Second, using this function, we select a reduced set of spatial filters that properly accounts for importer-side and exporter-side specific spatial effects, both at the count and the logit processes of zero-inflated methods. Applying this estimation strategy to a cross-section of bilateral trade flows between a set of worldwide countries for the year 2000, we find that our specification outperforms the benchmark models in terms of model fitting, both considering the AIC and in predicting zero (and small) flows.
- Language
-
Englisch
- Bibliographic citation
-
Series: Quaderni - Working Paper DSE ; No. 1081
- Classification
-
Wirtschaft
Semiparametric and Nonparametric Methods: General
Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
Trade: General
- Event
-
Geistige Schöpfung
- (who)
-
Metulini, Rodolfo
Patuelli, Roberto
Griffith, Daniel A.
- Event
-
Veröffentlichung
- (who)
-
Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
- (where)
-
Bologna
- (when)
-
2016
- DOI
-
doi:10.6092/unibo/amsacta/5426
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Metulini, Rodolfo
- Patuelli, Roberto
- Griffith, Daniel A.
- Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
Time of origin
- 2016
Other Objects (12)
A spatial-filtering zero-inflated approach to the estimation of the gravity model of trade
A spatial-filtering zero-inflated approach to the estimation of the gravity model of trade
On the equivalence of one‐inflated zero‐truncated and zero‐truncated one‐inflated count data likelihoods
A comparison of zero-inflated and hurdle models for modeling zero-inflated count data
Mediation analysis for zero-inflated mediators
Robust estimation of zero-inflated count models
On strongly dependent zero-inflated INAR(1) processes
Compositional zero-inflated network estimation for microbiome data
On strongly dependent zero-inflated INAR(1) processes
Zero Gravity
Zero Gravity
Zero Gravity
A spatial-filtering zero-inflated approach to the estimation of the gravity model of trade
A spatial-filtering zero-inflated approach to the estimation of the gravity model of trade
On the equivalence of one‐inflated zero‐truncated and zero‐truncated one‐inflated count data likelihoods
A comparison of zero-inflated and hurdle models for modeling zero-inflated count data
Mediation analysis for zero-inflated mediators
Robust estimation of zero-inflated count models
On strongly dependent zero-inflated INAR(1) processes
Compositional zero-inflated network estimation for microbiome data
On strongly dependent zero-inflated INAR(1) processes
Zero Gravity
Zero Gravity
Zero Gravity
A spatial-filtering zero-inflated approach to the estimation of the gravity model of trade
A spatial-filtering zero-inflated approach to the estimation of the gravity model of trade
On the equivalence of one‐inflated zero‐truncated and zero‐truncated one‐inflated count data likelihoods
A comparison of zero-inflated and hurdle models for modeling zero-inflated count data
Mediation analysis for zero-inflated mediators
Robust estimation of zero-inflated count models
On strongly dependent zero-inflated INAR(1) processes
Compositional zero-inflated network estimation for microbiome data
On strongly dependent zero-inflated INAR(1) processes
Zero Gravity
Zero Gravity