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W

EPSA 2013 Annual General Conference Paper 165

Political Science Research and Methods, 4 (1), 2016, pp. 175-193

41 Pages Posted: 4 Jun 2013 Last revised: 11 Dec 2015

Eric Neumayer

London School of Economics and Political Science (LSE)

Thomas Pluemper

Vienna University of Economics and Business - Department of Socioeconomics; University of Essex - Department of Government

Date Written: 2012

Abstract

In spatial econometrics, W refers to the matrix that weights the value of the spatially lagged variable of other units. As unimportant as it may appear, W specifies, or at least ought to specify, why and how other units of analysis affect the unit under observation. We show that theory must inform five crucial specification choices taken by researchers. Specifically, the connectivity variable employed in W must capture the causal mechanism of spatial dependence. The specification of W further determines the relative relevance of source units from which spatial dependence emanates and whether receiving units are assumed identically or differentially exposed to spatial stimulus. Multiple dimensions of spatial dependence can be modelled as independent, substitutive or conditional links. Finally, spatial effects need not go exclusively in one direction, but can be bi-directional instead, with recipients simultaneously experiencing positive spatial dependence from some sources and negative dependence from others. The importance of W stands in stark contrast to applied researchers typically employing crude proxy variables for true connectivity such as geographical proximity and adopting standard modelling convention for specifying W rather than substantive theory. We demonstrate which assumptions convention imposes on specification choices and argue that theories of spatial dependence will often conflict with them.

Suggested Citation

Neumayer, Eric and Pluemper, Thomas, W (2012). EPSA 2013 Annual General Conference Paper 165. Available at SSRN: https://ssrn.com/abstract=2224687 or http://dx.doi.org/10.2139/ssrn.2224687

Eric Neumayer

London School of Economics and Political Science (LSE) ( email )

Houghton Street
WC2A 2AE London
United Kingdom
+44 207 955 7598 (Phone)
+44 207 955 7412 (Fax)

HOME PAGE: http://personal.lse.ac.uk/neumayer

Thomas Pl├╝mper (Contact Author)

Vienna University of Economics and Business - Department of Socioeconomics ( email )

Vienna
Austria

University of Essex - Department of Government ( email )

Wivenhoe Park
Colchester, Essex CO4 3SQ
United Kingdom

HOME PAGE: http://www.polsci.org/pluemper

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