Country inclusion in gravity model

ejoh

New Member
#1
Hi!

I will be using a gravity model for my master thesis (not an economics/statistics major) focusing on remittance flows within the EU. I am familiar with the gravity model but have a fairly basic question to which I have not found the answer through books or articles.. or at least I have not understood it.

Articles on remittance flows specify recipient and sending countries, for example "33 recipient countries and 100 sending countries". As I understand it, this means that they include country A as either a recipient (making remittances from country B) or sending country (making remittances to country B), but do not take into account the fact that remittance occurs both ways (i.e. that country A both sends remittances (to B) and receives remittances (from B).

My question is, do I have to specify that a country is either a recipient OR a sending country in a simple gravity model, or can I include two-way remittance flows (country A and B as both sending (A-->B) and receiving (A<--B) countries)? If I need to distinguish recipient from sending countries, what would be a reasonable way to do so?

Thankful for answers.