Hello Statalist,
I am running the gravity model of trade at the product level.
So first I generated log of exports like this:
gen lnX = ln (X+1)
After that run the ppml with:
xi: ppml lnX ....
Is this approach wrong? Can I use log of dependent variable in PPML and add 1 before generating lnX. Because without 1, stata is giving "dependent variable lnX has negative values".
Or it`s better to run the model without log of dependent variable?
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