It accepts zero values that are common in the trade matrix and behaves well in the presence of heteroskedasticity (higher variance for smaller flows). It also guarantees that the margin total in rows and columns are preserved and is the only PML with this property: , and . Margin ...
White, H. A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica 1980, 48, 817–838. [Google Scholar] [CrossRef] Obenchain, R.L. Classical F-Tests and Confidence Regions for Ridge Regression. Technometrics 1977, 19, 429–439. [Google Sc...
White, H. A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica 1980, 48, 817–838. [Google Scholar] [CrossRef] Obenchain, R.L. Classical F-Tests and Confidence Regions for Ridge Regression. Technometrics 1977, 19, 429–439. [Google Sc...