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Triplets, quads and quints: Estimating disaggregate trade elasticities with different odds ratios

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  • Bohlmann Adrienne Margarete

    (Lehrstuhl für Volkswirtschaftslehre, insb. Makroökonomie, 26553 FernUniversität in Hagen, Universitätsstr. 11, 58097 Hagen, Germany)

Abstract

Trade elasticities are a crucial variable for research on international trade. Caliendo and Parro (2015) provide a novel method to estimate trade elasticities which is based on odds ratio triplets calculated from structural gravity equations. We find that these odds ratios can be set up not only as triplets, but also e. g. as quadruplets (quads) and quintuples (quints). We estimate trade elasticities from triplets, quads and quints for the two digit level of ISIC Rev.3. The corresponding estimates show certain differences, but the results are generally robust. Because the different odds ratios are all theoretically validated, we suggest using them for checking robustness. Benefits could also arise because larger odds ratios might be able to provide more reliable estimates.

Suggested Citation

  • Bohlmann Adrienne Margarete, 2021. "Triplets, quads and quints: Estimating disaggregate trade elasticities with different odds ratios," German Economic Review, De Gruyter, vol. 22(3), pages 359-381, August.
  • Handle: RePEc:bpj:germec:v:22:y:2021:i:3:p:359-381:n:5
    DOI: 10.1515/ger-2019-0128
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    More about this item

    Keywords

    trade elasticity; gravity; odds ratio; robustness;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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