[Joao Santos Silva]

Sorry, what exactly do you mean by country FE? Are these origin and destination FE or pair FE?

[Ainhoa Oses]

It is a bilateral model. Country fixed effects are dummies for all the origin countries that migrate to the country I am analysing.

The struggle is that as soon as I add population variables, the corresponding coefficients of these demographic variables are really high and make the model explosive. This happens namely for the demographic variables that refer to the destination country that I'm analysing. I'm thinking there might be collinearity issues. I need to get an insight on this since it's really important for my research...Thanks again.

Best regards,

Ainhoa

[Ainhoa Oses]

My fear is that these fixed effects have really high coefficients compared to the rest of the time-varying variables of my model. This might be contributing to the explosive predictions. Would you have any suggestions on how to tackle this?

I really appreciate your help!

[Joao Santos Silva]

If I understand you correctly, the country dummies are highly collinear with the country characteristics and with the lagged migration, so this is likely to result in a very unstable model. If your country variables do not vary over time they are perfectly collinear with the fixed effects and should be excluded; make sure you are not falling into that trap.

Best wishes,

Joao

[Ainhoa Oses]

Thanks Joao. Just a fundamental question: can PPML be used when the dependent variable is a rate? I'm using it for a gravity model where the dependent variable is the flow of migrants divided by the lagged population of origin.

Thanks again.

Ainhoa

[Joao Santos Silva]

Not ideal, but possibly adequate because I imagine that the rate is always very far from 1.

[Ainhoa Oses]

Perfect, Joao. Thanks a million for that.

Ainhoa

[Monicucha Paganini]

Dear Joao,

I wanted to ask you which gravity model should I run to estimate the impact of on FDI based on the counterfactual of full liberalization? should I first need to obtain predicted values from a gravity model on a sector where there is full liberalization already and then apply to other sectors?


thanks

[Monicucha Paganini]

Dear Joao,

which gravity model should I run for estimating the impact on FDI of the counterfactual full liberalization of the services sector?

thanks

[Joao Santos Silva]

Dear Monicucha Paganini,

I am sorry but I do not understand your question. Please rephrase it.

Best wishes,

Joao

[Huong Tran]

Dear Joao,

I am running PPML but my dependent variable is not exports. It is Co2 emission. Does PPML work in this case? However, I got the notification: "co2 not a valid estimator". Why it happens and how I can solve it? Co2 values are nonnegative.
Many thanks,
Huong

[Joao Santos Silva]

Dear Huong Tran,

Please show us exactly what you typed and the result you got.

Best wishes,

Joao

[Monicucha Paganini]

Dear Joao,

I wanted to ask you where the option standardize_data(0)standardize_data(0) should go in the PPML model.
thanks a lot

Monica

[Joao Santos Silva]

Dear Monicucha Paganini,

I do not think the ppml command has that option. What command are you using?

Best wishes,

Joao

[Maria Lopez]

Dear professor Joao,

Regarding to the use of PPML for gravity model, and as I have mentioned in other discussion groups, I am doing a gravity model for Nicaragua.
I have a question. When I apply PPML and remoteness variables for the exporting and importing country, I am not sure about the sign of the remoteness variables.
For thhe exporting remoteness variable I get this is negative related with the agriculutural exports of Nicaragua.
Shoul I worry about this? or these variables are only for control. Besides of that, I got the signs expected for the variables of interest.

Thank you so much for your time.

Maria