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Statistical Methods for the Preliminary Analysis of Transaction Flows

Leo A. Goodman

Abstract

Though a vocabulary relating to import-export data is used in this paper, the methods presented are applicable to other kinds of flow data as well. For data on the value (in dollars) of the imports and exports between specific countries, methods are developed that take into account the "effects" of the total size of trade of these countries on the trade between countries, adjusting the total size of trade to compensate for the fact that only data on trade between countries are used in the analysis. These methods are related to those given by Savage and Deutsch [3]. We note here that the methods in [3] require modification, we present the necessary modifications, and suggest alternative methods that are preferable in some respects to those in [3]. In addition, we present a generalization of the model and methods in [3] appropriate when trade between certain countries may be restricted.