Hi,

In a Gravity Model estimation with PPML,
which is the difference between these two options if I want to include fixed effects on my model? Are both correct?

Option 1:

egen exp = group(exporter)
quietly tabulate exp, gen(EXPORTER_FE)

egen imp = group(importer)
quietly tabulate imp, gen(IMPORTER_FE)

egen time = group(year)
quietly tabulate imp, gen(YEAR_FE)

Option 2:

egen exp_time = group(exporter year)
quietly tabulate exp_time, gen(EXPORTER_TIME_FE)

egen imp_time = group(importer year)
quietly tabulate imp_time, gen(IMPORTER_TIME_FE)


Thanks,

Daniel