An Experiment with Cross-Entropy Minimization: Estimation Interregional Trade Flows in Quebec

29 Pages Posted: 30 Aug 2005

See all articles by Jean Dubé

Jean Dubé

JDMD Groupe Conseils Inc.,

Andre Lemelin

INRS-UCS Université du Québec

Date Written: August 2005

Abstract

In this paper, we report on an experimental application of Kullback-Leibler cross-entropy minimization to estimate trade flows between regions. Interregional trade flows were estimated for 31 categories of goods and services, between three regions of the Province of Quebec in 1992: the Montreal and Quebec metropolitain areas, and the Rest-of-Quebec. With this bayesian-style method, we were able to obtain interregional flows that respect the marginal totals taken from pre-existing regional social accounting matrices, using transportation flow data as a priori distributions.

Keywords: Estimation, Interregional trade, transport flows, cross-entropy minimization

JEL Classification: R12, R13, C13, C81

Suggested Citation

Dubé, Jean and Lemelin, Andre, An Experiment with Cross-Entropy Minimization: Estimation Interregional Trade Flows in Quebec (August 2005). Available at SSRN: https://ssrn.com/abstract=787727 or http://dx.doi.org/10.2139/ssrn.787727

Jean Dubé

JDMD Groupe Conseils Inc., ( email )

344 de Lamennais
75013 Ste-Foy
France

Andre Lemelin (Contact Author)

INRS-UCS Université du Québec ( email )

385, rue Sherbrooke est
Montreal, Quebec H2X 1E3
Canada

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