County-Level Determinants of Local Public Services in Appalachia: A Multivariate Spatial Autoregressive Model Approach

Annals of Regional Science, Vol. 49(1), p. 175-190, 2012

18 Pages Posted: 27 Dec 2016

See all articles by Gebremeskel H. Gebremariam

Gebremeskel H. Gebremariam

West Virginia University - Division of Resource Management

Tesfa G. Gebremedhin

West Virginia University - Davis College of Agriculture, Forestry, and Consumer Sciences

Peter V. Schaeffer

West Virginia University

Date Written: 2012

Abstract

We develop a multivariate spatial autoregressive model of local public expenditure determination based on the maximization of a strictly quasi-concave community utility function. The existence of spatial interdependence is tested for both the spatial error and spatial lag model. The full model is estimated by efficient GMM following Kelejian and Prucha (J Real Estate Finan Econ 17(1):99–121, 1998). The results indicate significant spillover effects among local governments with respect to spending on public services. The OLS estimates of the conventional (non-spatial) model and the corresponding maximum likelihood estimates of the spatial lag and the spatial error models are presented for comparison purposes. The GMM estimates are found to be more efficient.

Keywords: Appalachia, Public Services, Spatial Modeling

JEL Classification: C31, O1, R15, R51

Suggested Citation

Gebremariam, Gebremeskel H. and Gebremedhin, Tesfa G. and Schaeffer, Peter V., County-Level Determinants of Local Public Services in Appalachia: A Multivariate Spatial Autoregressive Model Approach (2012). Annals of Regional Science, Vol. 49(1), p. 175-190, 2012, Available at SSRN: https://ssrn.com/abstract=2884838

Gebremeskel H. Gebremariam (Contact Author)

West Virginia University - Division of Resource Management ( email )

Morgantown, WV 26506
United States

Tesfa G. Gebremedhin

West Virginia University - Davis College of Agriculture, Forestry, and Consumer Sciences ( email )

Morgantown, WV 26506
United States

Peter V. Schaeffer

West Virginia University ( email )

P.O. Box 6108
Morgantown, WV 26506-6108
United States
304-293-5572 (Phone)
304-293-3752 (Fax)

HOME PAGE: http://www.petervschaeffer.com

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