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Gravity model specification and estimation: revisited

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  • Kaliappa Kalirajan

Abstract

The gravity model is one of the most frequently estimated empirical relationships in economics. However, the most commonly used form of the relationship is not correctly specified. This article discusses the specific sources of imprecision in modelling and estimation of gravity equations and suggests a method to correct the specification bias.

Suggested Citation

  • Kaliappa Kalirajan, 2008. "Gravity model specification and estimation: revisited," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 1037-1039.
    • Handle: RePEc:taf:apeclt:v:15:y:2008:i:13:p:1037-1039
    DOI: 10.1080/13504850600993499
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    References listed on IDEAS

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    1. Andrei A. Levchenko, 2007. "Institutional Quality and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 791-819.
    2. Kishore Gawande and Pravin Krishna, 2001. "The Political Economy of Trade Policy: Empirical Approaches," Working Papers 2001-38, Brown University, Department of Economics.
    3. Rodrik, Dani, 2000. "Trade Policy Reform as Institutional Reform," IDB Publications (Working Papers) 2189, Inter-American Development Bank.
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    2. Nguyen, Van Son & Kalirajan, Kaliappa, 2016. "Export of environmental goods: India's potential and constraints," Environment and Development Economics, Cambridge University Press, vol. 21(2), pages 158-179, April.
    3. Memduh Alper Demir & Mustafa Bilik & Utku Utkulu, 2017. "The Impact of Competitiveness on Trade Efficiency: The Asian Experience by Using the Stochastic Frontier Gravity Model," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 5(4), pages 1-15.
    4. Michael Tutu Boadu & Camara Kwasi Obeng & Isaac Dasmani & William Gabriel Brafu‐Insaidoo, 2021. "Assessing Ghana's bilateral exports potential and gap," African Development Review, African Development Bank, vol. 33(4), pages 634-647, December.
    5. Pathairat Pastpipatkul & Petchaluck Boonyakunakorn & Kanyaphon Phetsakda, 2020. "The Impact of Thailand’s Openness on Bilateral Trade between Thailand and Japan: Copula-Based Markov Switching Seemingly Unrelated Regression Model," Economies, MDPI, vol. 8(1), pages 1-13, January.
    6. Ebaidalla Mahjoub Ebaidalla & Mohammed Elhaj Mustafa Ali, 2018. "Assessing the Intra-Arab Trade Integration and Potential: Evidence from Stochastic Frontier Gravity Model," Working Papers 1247, Economic Research Forum, revised 07 Nov 2018.
    7. Shiro Patrick Armstrong, 2015. "East and South Asia: Managing Difficult Bilateral Relations and Regional Integration Globally," Asian Economic Journal, East Asian Economic Association, vol. 29(4), pages 303-324, December.
    8. Pelayo Arbués & José F. Baños, 2016. "A dynamic approach to road freight flows modeling in Spain," Transportation, Springer, vol. 43(3), pages 549-564, May.
    9. Kaliappa Kalirajan & Yichang Liu, 2016. "Renewable energy trade within Regional Comprehensive Economic Partnership (RCEP) countries: an exploratory analysis," ASARC Working Papers 2016-05, The Australian National University, Australia South Asia Research Centre.
    10. Azam, Sardor, 2016. "Trade and Environment: Do Spatial Effects Matter?," MPRA Paper 73113, University Library of Munich, Germany, revised Jun 2016.

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