PPML Stata Code

[Niklas Schmiedel]

Hello everyone,
I am currently trying a PPML estimation to analyze a few countries and FTA's for trade creation and trade diversion. I want to use the PPML method for this. My current command looks like this:
ppml_panel_sg value_trade ln_GDPexp lnGDPimp ln_POPexp ln_POPimp ln_dist comlang_off contig Intra Extra, ex(iso_o) im(iso_d) y(year)
Intra is a dummy variable for trade creation and Extra is a dummy for trade diversion.

My questions/problems at the moment are:
1) Every time I try to run this command in Stata, ln_GDPexp lnGDPimp ln_POPexp ln_POPimp ln_dist comlang_off contig and Extra are omitted. What is the reason for this and is there a way around it?
2) Is there perhaps a better command in Stata for analyzing trade data with the PPML?
I am happy to receive any information on this topic.
Best regards

[Joao Santos Silva]

Dear Niklas Schmiedel,

Those variables are dropped because they are collinear with the fixed effects. I suggest you use ppmlhdfe, but the results should be exactly the same.

Best wishes,

Joao

[Niklas Schmiedel]

I will try your suggestion. Thank you very much.