Hello,
I need some help in dealing with the ppml_panel_sg command to estimate a gravity equation using the PPML method.
The issue is that my dataset on trade flows is focused on a specific country, say the US. In that sense, I only have a panel of US exports to Germany and France, and of US imports to Germany and France across the years, not on trade flows between France and Germany.
This of course precludes me from using exporter-year and importer-year fixed effects.
As an alternative, I ran the following sort of regression by OLS:
In which i is the exporter, j is the exporter.
Is it possible to do something similar using the ppml_panel_sg command? It appears it actually requires these rich fixed effects, so when I run the following:
I get, as expected, the following error
Is there any way to bypass this?
Thank you
I need some help in dealing with the ppml_panel_sg command to estimate a gravity equation using the PPML method.
The issue is that my dataset on trade flows is focused on a specific country, say the US. In that sense, I only have a panel of US exports to Germany and France, and of US imports to Germany and France across the years, not on trade flows between France and Germany.
This of course precludes me from using exporter-year and importer-year fixed effects.
As an alternative, I ran the following sort of regression by OLS:
Code:
reghdfe log_flow ln_tariff , absorb(i j) vce(robust)
outreg2 ln_tariff using sigma_ols.xls, append dec(3)
Is it possible to do something similar using the ppml_panel_sg command? It appears it actually requires these rich fixed effects, so when I run the following:
Code:
ppml_panel_sg flow ln_tariff , exporter(i) importer(j) year(year) nopair robust
outreg2 ln_tariff using sigma_ppml.xls, append dec(3)
Code:
Initializing... Checking for possible non-existence issues... insufficient observations
Thank you
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