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Abstract
Recently gravity trade models are applied to disaggregated trade data. Here many zeros are
characteristic. In the presence of excess zeros usual Poisson Pseudo Maximum Likelihood
(PPML) is still consistent, the variance covariance matrix however is invalid. Correct
economic interpretation however requires also the last. So alternative estimators are looked
for. STAUB &WINKELMANN (2010) argue that zero-inflated count data models (i.e. zero-inflated
Poisson / Negative Binomial Pseudo Maximum Likelihood (ZIPPML / ZINBPML)) are no
alternative since under model misspecification these estimators are inconsistent. Yet zeroinflated
Poisson Quasi-Likelihood (PQL) is a reliable alternative. It is consistent even under
model misspecifications and beyond that robust against unobserved heterogeneity. Another
alternative is a log-skew-normal Two-Part Model (G2PM) which generalises the standard lognormal
Two-Part Model (2PM). It is insofar advantageous as it adjusts for (negative)
skewness and regression coefficients retain usual interpretations as in log-normal models.
PQL is useful for multiplicative gravity model estimation and G2PM for log-linear gravity
model estimation. Exemplarily the estimators are applied to intra-European piglet trade to
assess their empirical performance and applicability for single commodity trade flow analysis.
The empirical part favours PQL but G2PM is a reliable alternative for other trade flow
analyses. PQL and G2PM should become standard tools for single commodity trade flow analysis.