The Surprising Bias of PPML Estimates of Structural Gravity Models With Two‐Way Fixed Effects
Review of International Economics, Volume 34, Issue 3, Page 615-631, August 2026.ABSTRACT The previous literature has shown that the Poisson Pseudo‐Maximum Likelihood (PPML) estimator provides consistent and asymptotically unbiased estimates of the parameters of structural gravity models with two‐way fixed effects, although their standard errors need correction.
Ben Shepherd, Tom Zylkin
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