TY - JOUR
T1 - A simple solution to the distance puzzle
T2 - balanced data and Poisson estimation
AU - Buehler, David
AU - White, Roger
N1 - Publisher Copyright:
© 2014, © 2014 Taylor & Francis.
PY - 2015/5/3
Y1 - 2015/5/3
N2 - We propose the use of a balanced panel data set and Poisson regression as a solution to the distance puzzle. Employing annual data for the period 1972–2010, we confirm the existence of the puzzle by applying OLS regression to both an unbalanced panel data set and a narrowly defined balanced panel. We find that Poisson regression remedies the distance puzzle, producing a constant trend for the distance coefficient when the unbalanced panel is examined and a positive trend for the balanced data. The findings confirm the common intuition that the influence of transport costs on trade flows has decreased over time.
AB - We propose the use of a balanced panel data set and Poisson regression as a solution to the distance puzzle. Employing annual data for the period 1972–2010, we confirm the existence of the puzzle by applying OLS regression to both an unbalanced panel data set and a narrowly defined balanced panel. We find that Poisson regression remedies the distance puzzle, producing a constant trend for the distance coefficient when the unbalanced panel is examined and a positive trend for the balanced data. The findings confirm the common intuition that the influence of transport costs on trade flows has decreased over time.
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U2 - 10.1080/13504851.2014.959650
DO - 10.1080/13504851.2014.959650
M3 - Article
AN - SCOPUS:84923567808
SN - 1350-4851
VL - 22
SP - 587
EP - 592
JO - Applied Economics Letters
JF - Applied Economics Letters
IS - 7
ER -