Scandinavian Working Papers in Economics

Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

No 2010/3: The spatial transferability of parameters in a gravity model of commuting flows

David Philip McArthur (), Gisle Kleppe (), Inge Thorsen () and Jan Ubøe ()
Additional contact information
David Philip McArthur: Stord/Haugesund University College, Postal: Stord/Haugesund University College, Klingenbergvegen 8, N-5414 Stord, Norway
Gisle Kleppe: Stord/Haugesund University College, Postal: Stord/Haugesund University College, Klingenbergvegen 8, N-5414 Stord, Norway
Inge Thorsen: Stord/Haugesund University College, Postal: Stord/Haugesund University College, Klingenbergvegen 8, N-5414 Stord, Norway
Jan Ubøe: Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Finance and Management Science, Helleveien 30, N-5045 Bergen, Norway

Abstract: This paper studies whether gravity model parameters estimated in one geographic area can give reasonable predictions of commuting flows in another. To do this, three sets of parameters are estimated for geographically proximate yet separate regions in south-west Norway. All possible combinations of data and parameters are considered, giving a total of nine cases. Of particular importance is the distinction between statistical equality of parameters and `practical' equality i.e. are the differences in predictions big enough to matter. A new type test best on the Standardised Root Mean Square Error (SRMSE) and Monte Carlo simulation is proposed and utilised.

Keywords: Gravity model; commuting flows; regional science

JEL-codes: R10; R12

26 pages, May 19, 2010

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