Aggregravity: Estimating Gravity Models from Aggregate Data

Publication: Working/Discussion PaperWU Working Paper

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Abstract

This paper considers alternative methods to estimate econometric models based on bilateral data when only aggregate information on the dependent variable is available. Such methods can be used to obtain an indication of the sign and magnitude of bilateral model parameters and, more importantly, to decompose aggregate into bilateral data, which can then be used as proxy variables in further empirical analysis. We perform a Monte Carlo study and carry out a simple real world application using intra-EU trade and capital flows, showing that the methods considered work reasonably well and are worthwhile being considered in the absence of bilateral data. (authors' abstract)
Original languageEnglish
DOIs
Publication statusPublished - 2014

Publication series

SeriesDepartment of Economics Working Paper Series
Number183

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 506004 European integration
  • 502025 Econometrics
  • 502047 Economic theory
  • 502003 Foreign trade
  • 502018 Macroeconomics

WU Working Paper Series

  • Department of Economics Working Paper Series

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