Statistical Gravity Model

The Statistical Gravity Model is a method used in economics and geography to predict trade and interaction between regions or countries. It suggests that the volume of trade between two places is influenced by their economic sizes (like GDP) and the distance between them. Just as larger masses attract each other more strongly in physics, bigger economies tend to trade more with each other, while greater distances generally reduce trade due to transportation costs and barriers. This model helps analyze patterns in international trade and migration, providing insights into economic relationships and behaviors.