Estimating the Gravity Model
Posted: Mon Nov 17, 2014 8:40 am
Hi!
I am working on a paper and I need to estimate the Gravity model of trade for Belgium. I have panel data with the GDP of all countries for 3 years (2011, 2012 and 2013), the distance from Belgium to "country x", Net trade (between Belgian and country x), and 2dummy variables (if the country belongs to the EU and if the country is at war)
So I need to calculate the following:
Net trade = C + GDP (Belgium) + GDP (all other countries) + Distance + Dummy (war) + dummy (EU member)
The problem is that I don't know how to obtain the second and third term of my equation since I have only one column with all the country's GDP. How do I exclude all countries from the GDP (so I only have Belgium's GDP) and then how do I only exclude Belgium (so I have every country's GDP except for Belgium)?
I have attached the data file to clarify my question.
Thank you in advance!
Celeste
I am working on a paper and I need to estimate the Gravity model of trade for Belgium. I have panel data with the GDP of all countries for 3 years (2011, 2012 and 2013), the distance from Belgium to "country x", Net trade (between Belgian and country x), and 2dummy variables (if the country belongs to the EU and if the country is at war)
So I need to calculate the following:
Net trade = C + GDP (Belgium) + GDP (all other countries) + Distance + Dummy (war) + dummy (EU member)
The problem is that I don't know how to obtain the second and third term of my equation since I have only one column with all the country's GDP. How do I exclude all countries from the GDP (so I only have Belgium's GDP) and then how do I only exclude Belgium (so I have every country's GDP except for Belgium)?
I have attached the data file to clarify my question.
Thank you in advance!
Celeste