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Faculty of Economics

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Jochmans, K. and Verardi, V.

twexp and twgravity: Estimating exponential regression models with two-way fixed effects


Abstract: We introduce the commands twexp and twgravity that implement the estimators developed in Jochmans (2017) for exponential regression models with two-way fixed effects. twexp is applicable to generic n x m panel data. twgravity is written for the special case where the data is a cross-section on dyadic interactions between n agents. A prime example of the latter is cross-sectional bilateral trade data, where the model of interest is a gravity equation with importer and exporter effects. Both twexp and twgravity can deal with data where n and m are large, that is, the case of many fixed effects. They make use of Mata and are very fast to execute.

Keywords: exponential regression, gravity model, panel data, two-way fixed effects

JEL Codes: C33 C87

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Published Version of Paper: twexp and twgravity: Fitting Exponential Regression Models with Two-way Fixed Effects, Jochmans, K. and Verardi, V., Stata Journal (2020)

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