An Experiment with Cross-Entropy Minimization: Estimation Interregional Trade Flows in Quebec
29 Pages Posted: 30 Aug 2005
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: Suggested Citation