Hi,
For my thesis I am intending to estimate a gravity model, looking at specifically the effect of the SAFTA trade agreement on trade in agri-food products.I would like to be able to estimate the level of trade creation and trade diversion occuring. I have a few specific questions I am hoping can be answered on this forum, and also looking for any advice you may have in regard to this study.
Some questions...
1. The dataset I have formed only contains import data, would it be meaningful to do the same study using export data, can i expect the results to be different? it took quite a while to create the import data set so would like to know before I spend time creating on for export data...
2. I first started with a simplified estimation...
. ppml foodimports ln_dist ln_gdp1 ln_gdp2
note: checking the existence of the estimates
WARNING: foodimports has very large values, consider rescaling
WARNING: ln_dist has very large values, consider rescaling or recentering
WARNING: ln_gdp1 has very large values, consider rescaling or recentering
WARNING: ln_gdp2 has very large values, consider rescaling or recentering
Number of regressors excluded to ensure that the estimates exist: 0
Number of observations excluded: 0
note: starting ppml estimation
note: foodimports has noninteger values
Iteration 1: deviance = 1.32e+11
Iteration 2: deviance = 1.10e+11
Iteration 3: deviance = 1.07e+11
Iteration 4: deviance = 1.07e+11
Iteration 5: deviance = 1.07e+11
Iteration 6: deviance = 1.07e+11
Iteration 7: deviance = 1.07e+11
Iteration 8: deviance = 1.07e+11
Iteration 9: deviance = 1.07e+11
Iteration 10: deviance = 1.07e+11
Number of parameters: 4
Number of observations: 418761
Pseudo log-likelihood: -5.361e+10
R-squared: 6.988e-08
Option strict is: off
Robust
foodimports Coef. Std. Err. z P>z [95% Conf. Interval]
ln_dist -1.85e-20 7.07e-23 -261.78 0.000 -1.87e-20 -1.84e-20
ln_gdp1 7.27e-07 1.47e-06 0.49 0.621 -2.15e-06 3.61e-06
ln_gdp2 -2.34e-20 5.44e-23 -430.94 0.000 -2.35e-20 -2.33e-20
_cons 10.71151 .0123599 866.64 0.000 10.68729 10.73574
magnitude of coefficients are very small as is the R squared, i assume this is because i havent used fixed effects, and/or many variables.
when i do include some more variables, for example a couple of different trade agreement dummies, the level of iterations goes behind 50, at which point I cancel the estimation because it is taking too long. Is this usual and i should be patient, or is something wrong with my estimation?
ppml foodimports ln_dist ln_gdp1 ln_gdp2 comesa nafta safta
note: checking the existence of the estimates
WARNING: foodimports has very large values, consider rescaling
WARNING: ln_dist has very large values, consider rescaling or recentering
WARNING: ln_gdp1 has very large values, consider rescaling or recentering
WARNING: ln_gdp2 has very large values, consider rescaling or recentering
WARNING: comesa has very large values, consider rescaling or recentering
WARNING: nafta has very large values, consider rescaling or recentering
WARNING: safta has very large values, consider rescaling or recentering
Number of regressors excluded to ensure that the estimates exist: 0
Number of observations excluded: 0
note: starting ppml estimation
note: foodimports has noninteger values
Iteration 1: deviance = 1.02e+36
Iteration 2: deviance = 3.75e+35
Iteration 3: deviance = 1.38e+35
Iteration 4: deviance = 5.08e+34
Iteration 5: deviance = 1.87e+34
Iteration 6: deviance = 6.88e+33
CONTINUES FOREVER....
3. I would also like to control for country fixed effects, using the code:
. egen exporter = group (iso_o)
(32735 missing values generated)
. egen importer = group (iso_d)
(77313 missing values generated)
. ppml foodimports ln_dist ln_gdp1 ln_gdp2 i.exporter i.importer
factor variables and time-series operators not allowed
r(101);
I am unsure why this occurs.
4. which method is best to control for country fixed effects, and is it necessary to include time fixed effects, and country pair fixed effects? i am using a panel data set
5. please suggest to me any other advice on things I should consider in order to find some reliable results in my study!
Thank you very much in advance, Any help is greatly appreciated
Megan
Related Posts with Estimating the gravity model using PPLM, general advice
Making a square boxHi all, I have a problem with the image attached. In particular, I do not understand why the scale …
How to display "Fixed effects: heterogeneity across years (stripplot)?"Good morning to the community Stata! I would like to show a graph like the picture showing geometri…
How to do tabstat varlist with all variablesDear Stata users, I have data with long variable names. When I want to use "summarize", it abbrevia…
Error: Option Dynamic Not Allowed in the Command PredictHi, I am doing ex-ante out of sample forecasting for rail freight. Based on the results of the ADF …
Multiple Comparison of Predictive MarginsDear all Statalists, I am using the following model in Stata 16.1: Code: nbreg y i.x1 i.x2 (other …
Subscribe to:
Post Comments (Atom)
0 Response to Estimating the gravity model using PPLM, general advice
Post a Comment