A Balls-and-Bins Model of Trade: Reply

Blum, Claro, and Horstmann (2016) make two statements about the balls-and-bins model of Armenter and Koren (2014). First, that using rm-level shipment data changes some of our results. Second, that the balls-and-bins model is not an appropriate statistical method. We respond to the rst statement and argue that the second state- ment is unfounded and unrelated to the rst. Indeed, the work of Blum, Claro, and Horstmann (2016) is a perfect example of how to use balls-and-bins in a rich dataset to spot interesting data patterns.