This thesis investigates the question if the estimation of gravity model of in- ternational trade based on the logarithmic transformation of the model is ad- visable when panel data are employed for the estimation. We have derived theoretically that in the presence of heteroskedasticity the logarithmic trans- formation causes inconsistency of the estimated coefficients. According to the literature, we have recommended rather the Poisson pseudo maximum likeli- hood estimation technique for the empirical research of the gravity model. We have also provided an empirical analysis of Czech and German panel data sets based on the comparison of the performance of traditional and Poisson estima- tion approaches. This analysis confirrms Poisson pseudo maximum likelihood estimation method as a more proper method for estimating the coefficients of the gravity equation.
| Identifer | oai:union.ndltd.org:nusl.cz/oai:invenio.nusl.cz:311286 |
| Date | January 2012 |
| Creators | Bobková, Božena |
| Contributors | Benáček, Vladimír, Baruník, Jozef |
| Source Sets | Czech ETDs |
| Language | English |
| Detected Language | English |
| Type | info:eu-repo/semantics/masterThesis |
| Rights | info:eu-repo/semantics/restrictedAccess |
Page generated in 0.0019 seconds