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  • PPML Robustness check

    Hi I am running a PPML model with exporter, importer and country pair fixed effects to estimate gravity model.
    I wanted to do a robustness check, I know that I can conduct a RESET test. I am wondering what are other methods that I can use for a robustness check for this sort of model. For instance, If I do a Lagrange Multiplier test would that be suitable? or are there better methods.
    This is the command that I use for my regression:
    ppmlhdfe y x1 x2, absorb (exporterFE ImporterFE Country-pairFE) cluster (id)

  • #2
    Dear Tina Samuel,

    Apologies for the late reply. The RESET is really the main thing to do because it tests the assumption that the functional form of the model is correct, which is the only assumption you really need.

    Best wishes,

    Joao

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    • #3
      Thank you for your reply. I conducted the RESET test.

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