This page presents working papers by USITC authors that make use of the USITC's gravity modeling environment.
Publication No. 2018-02-A
Tamara Gurevich and Peter Herman, Office of Economics, USITC
The estimation of gravity models of international trade extensively relies on the availability of unilateral and bilateral, country pair measures of theoretical determinants of trade. Existing datasets provide a wealth of information, but often come short in terms of temporal and other forms of variation. This paper presents a recently developed Dynamic Gravity dataset that improves upon existing gravity datasets by including additional variables of interest and featuring greater variation for use in econometric analysis. We describe the dataset and highlight the key differences between our Dynamic Gravity dataset and the datasets often used by researchers previously. Analytical comparisons are included that that demonstrate important similarities and differences through summary statistics and estimates of sample gravity models using the Dynamic Gravity dataset and two alternative data sources: the CEPII gravity database constructed by Head et al. (2010) and the Rose (2004) dataset. We find that the Dynamic Gravity dataset is nearly indistinguishable from the other sources and produces results consistent with international trade theory. However, in some cases, it produces results that are qualitatively similar but quantitatively different from the others, which we take as support that our attempts to improve on past datasets have worked.