Abstract
In this paper, we demonstrate that the conventional ordinary least squares and fixed effects estimators of classical gravity models of migration are biased, and that the interpretation of coefficients in the fixed effects gravity model is typically incorrect. We then present a best linear unbiased (BLU) estimator for gravity models of migration, and illustrate its application with inter-regional data from New Zealand. The results demonstrate that the standard ordinary least squares and fixed effect models lead to biased coefficients on population. Alternative estimates that are BLU are provided for a data generating process with fixed origin and destination effects. The coefficients on population must be interpreted in this model as growth rate effects rather than level effects. Our findings also have significance for other types of spatial interaction modelling.
| Original language | English |
|---|---|
| Pages (from-to) | 9-15 |
| Number of pages | 7 |
| Journal | Letters in Spatial and Resource Sciences |
| Volume | 12 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 4 Apr 2019 |
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Keywords
- Fixed effects
- Gravity model
- Gross migration flows
- New Zealand
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The estimation and interpretation of coefficients in panel gravity models of migration. / Cameron, Michael P.; Poot, Jacques.
In: Letters in Spatial and Resource Sciences, Vol. 12, No. 1, 04.04.2019, p. 9-15.Research output: Contribution to Journal › Article › Academic › peer-review
TY - JOUR
T1 - The estimation and interpretation of coefficients in panel gravity models of migration
AU - Cameron, Michael P.
AU - Poot, Jacques
PY - 2019/4/4
Y1 - 2019/4/4
N2 - In this paper, we demonstrate that the conventional ordinary least squares and fixed effects estimators of classical gravity models of migration are biased, and that the interpretation of coefficients in the fixed effects gravity model is typically incorrect. We then present a best linear unbiased (BLU) estimator for gravity models of migration, and illustrate its application with inter-regional data from New Zealand. The results demonstrate that the standard ordinary least squares and fixed effect models lead to biased coefficients on population. Alternative estimates that are BLU are provided for a data generating process with fixed origin and destination effects. The coefficients on population must be interpreted in this model as growth rate effects rather than level effects. Our findings also have significance for other types of spatial interaction modelling.
AB - In this paper, we demonstrate that the conventional ordinary least squares and fixed effects estimators of classical gravity models of migration are biased, and that the interpretation of coefficients in the fixed effects gravity model is typically incorrect. We then present a best linear unbiased (BLU) estimator for gravity models of migration, and illustrate its application with inter-regional data from New Zealand. The results demonstrate that the standard ordinary least squares and fixed effect models lead to biased coefficients on population. Alternative estimates that are BLU are provided for a data generating process with fixed origin and destination effects. The coefficients on population must be interpreted in this model as growth rate effects rather than level effects. Our findings also have significance for other types of spatial interaction modelling.
KW - Fixed effects
KW - Gravity model
KW - Gross migration flows
KW - New Zealand
UR - http://www.scopus.com/inward/record.url?scp=85057866338&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85057866338&partnerID=8YFLogxK
U2 - 10.1007/s12076-018-00220-y
DO - 10.1007/s12076-018-00220-y
M3 - Article
VL - 12
SP - 9
EP - 15
JO - Letters in Spatial and Resource Sciences
JF - Letters in Spatial and Resource Sciences
SN - 1864-4031
IS - 1
ER -