Hello,
Here is my question:
I am testing the curvilinear (inverted U-shape) effect of distance (cultural distance) on number of trades between pairs of countries (6000 pairs). I was using ppml command from Gravity package in R, and now I am trying to use STATA to make sure I get the same results.
My questions are:
1. The R ppml command automatically Log transforms the "distance" measure. What about ppml in STATA? this is specially important because I need to test the quadratic effect of distance on number of trades.
2. How can I incorporate the quadratic term in STATA ppml package? Shoud I just generate a distance^2 or should I generate (Log(distance))^2 and use it in my model?
Thank you so much in advance
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