Blum, Claro, and Horstmann (2016) make two statements about the balls-and-bins model
of Armenter and Koren (2014). First, that using firm-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 first statement and argue that the second statement is unfounded
and unrelated to the first. 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. (JEL F11, F14)
