arXiv 23 Nov 2023 · Econometrics · publishedThe Review of Economics and Statistics (2026)
arXiv:2311.14032 · PDF · DOI · OpenAlex · Extracted main text
Counterfactuals in quantitative trade and spatial models are functions of the current state of the world and the model parameters. Common practice treats the current state of the world as perfectly observed, but there is good reason to believe that it is measured with error. This paper provides tools for quantifying uncertainty about counterfactuals when the current state of the world is measured with error. I recommend an empirical Bayes approach to uncertainty quantification, and show that it is both practical and theoretically justified. I apply the proposed method to the settings in Adao, Costinot, and Donaldson (2017) and Allen and Arkolakis (2022) and find non-trivial uncertainty about counterfactuals.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Jonathan I. Dingel and Felix Tintelnot (2025) Spatial Economics for Granular Settings | 0.946 | 13 | 4 | 85% |
| 2 | Costinot, Arnaud and Rodr\'iguez-Clare, Andrés (2014) Trade theory with numbers: Quantifying the consequences of globalization | 0.928 | 5 | 3 | 80% |
| 3 | Allen, Treb and Arkolakis, Costas (2022) The welfare effects of transportation infrastructure improvements | 0.897 | 18 | 6 | 72% |
| 4 | Linsi, Lukas and Burgoon, Brian and Mügge, Daniel K (2023) The Problem with Trade Measurement in International Relations | 0.855 | 8 | 4 | 62% |
| 5 | Adao, Rodrigo and Costinot, Arnaud and Donaldson, Dave (2017) Nonparametric counterfactual predictions in neoclassical models of international trade | 0.794 | 34 | 9 | 50% |
| 6 | Allen, Treb and Arkolakis, Costas (2018) 13 Modern spatial economics: a primer | 0.659 | 7 | 5 | 29% |
| 7 | Armington, Paul S (1969) A Theory of Demand for Products Distinguished by Place of Production | 0.644 | 2 | 2 | 100% |
| 8 | Goes, Iasmin (2023) The Reliability of International Statistics Across Sources and Over Time | 0.644 | 2 | 2 | 100% |
| 9 | Musunuru, Anusha and Porter, Richard J (2019) Applications of measurement error correction approaches in statistical road safety modeling | 0.644 | 2 | 2 | 100% |
| 10 | Walters, Christopher (2024) Empirical Bayes methods in labor economics | 0.511 | 3 | 2 | 33% |
Showing the top 10 of 38 scored citations.