8 - Chaney_model_Chaney_slides

# Problem 2 average exports decrease with distance

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Unformatted text preview: j ( ) dG ( ) d ij - r ij g ij d ij ij ij ij rij ( ) dG ( ) dfij - r ( ij ) g ij dfij fij fij Extensive margin Thomas Chaney (University of Chicago) ECON 357 14 / 17 Intensive versus extensive margins - d ln Xij - = d ln fij d ln Xij = ( - 1) +( - ( - 1)) = d ln ij Intensive margin Elasticity Extensive margin Elasticity Intensive margin Elasticity = 0 and &lt;0 0 + -1 = -1 -1 -1 Extensive margin Elasticity Thomas Chaney (University of Chicago) ECON 357 15 / 17 Some empirics (size distribution and gravity) ln (Distanceij ) h h -1 -.9 (.04)*** -.8 (.04)*** -.7 (.04)*** ln (Distanceij ) .3 (.1)*** -.09 (.002)*** -.09 (.003)*** Languageij h h -1 Languageij h h -1 Borderij 1.6 (.2)*** -.4 (.02)** -.4 (.05)*** .4 (.05)*** Borderij .8 (.02)*** 3.9 (.3)*** 1.4 (.3)*** -.7 (.008)*** -.3 (.08)* R2 Number of obs. Thomas Chaney (University of Chicago) 30% 65,687 31% 65,687 ECON 357 23% 65,687 25% 65,687 32% 65,687 16 / 17 Some empirics (differentiation and gravity) ln (Distanceij ) ^ h ln (Distanceij ) Languageij ^ h Languageij Borderij ^ h Borderij R2 Number of obs. 39% 270,607 40% 257,583 ECON 357 -.8 (.02)*** -1 (.02)*** -.9 (.02)*** .02 (.001)*** .015 (.001)*** .4 (.04)*** 1.2 (.09)*** .5 (.05)*** -.02 (.004)*** -.02 (.004)*** .5 (.08)*** 2.3 (.1)*** .6 (.09)*** -.04 (.006)*** -.01 (.006)* 33% 257,583 35% 257,583 41% 257,583 17 / 17 Thomas Chaney (University of Chicago)...
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