Hey,
I am estimating the gravity model to obtain residuals at the sectoral level. My goal is to calculate tariff equivalent(AVEs) using the residuals of the gravity equation.
I am using Stata 16.0 and data for the year 2014, 191 countries.
I run the OLS model using the command: reg Intrade lndist x2 x3 x4.. where Intrade is the dependant variable (value of export in sector a), lndist is the log of distance, and x2, x3, x4 are other gravity variables. As the recent literature suggests, I want to use Poisson pseudo-maximum likelihood (PPML) to treat the zero values in the gravity regression.
I would really appreciate it if you share the Stata commands for PPML.
Many thanks in advance.
Regards,
Bushra
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