Doubly constrained gravity models for interregional trade estimation

Abstract

This paper discusses a family of methods grounded in the doubly constrained gravity model (DCGM) for the estimation of product‐specific origin–destination matrices of interregional trade. We argue that several estimation procedures documented in the literature, although outwardly unrelated, can be conceptualized as applications of the DCGM framework. We show that DCGM estimation requires less restrictive assumptions and fewer data than commonly thought. We demonstrate that, in ideal conditions, the unknown trade flows can be recovered exactly through a standard application of the RAS algorithm. Finally, we examine how a DCGM estimator might fare in applications using Monte Carlo techniques and give an example of its use with real‐world data.

Chinese provincial multi-regional input-output database for 2012, 2015, and 2017

“…It is worth noting that the standard gravity model requires trade sample data to estimate the parameters. When the sample data are unavailable, the doubly constrained gravity model can be chosen as a reliable alternative 34 . The doubly constrained gravity model has also been used by IMPLAN to build a sub-national trade matrix for the US 35 , 36 .…”

Eficiencia en la estimación de coeficientes técnicos y multiplicadores interregionales: la metodología Jahn versus las metodologías GRAS y GravityRAS

“…e RAS methodology combined with gravity modelling, applied to inter-regional frameworks, has been applied in different works such as Cai (2022Cai ( , 2020, Fournier (2020), Sargento et al (2012), Temursho et al (2021) or Yamada (2015) by defining as a starting point the set of inter-regional trade variables based on the implementation of a given gravity model and then adjusting these variables to the necessary production and employment margins to obtain an adjusted solution.…”