Misspecification in Linear Spatial Regression Models

Tinbergen Institute Discussion Papers No. 2003-081/3

30 Pages Posted: 17 Nov 2003

See all articles by Raymond J.G.M. Florax

Raymond J.G.M. Florax

Purdue University; VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics; Tinbergen Institute

Date Written: October 3, 2003

Abstract

Spatial effects are endemic in models based on spatially referenced data. The increased awareness of the relevance of spatial interactions, spatial externalities and networking effects among actors, evoked the area of spatial econometrics. Spatial econometrics focuses on the specification and estimation of regression models explicitly incorporating such spatial effects. The multidimensionality of spatial effects calls for misspecification tests and estimators that are notably different from techniques designed for the analysis of time series. With that in mind, we introduce the notion of spatial effects, referring to both heterogeneity and interdependence of phenomena occurring in two-dimensional space. Spatial autocorrelation or dependence can be detected by means of cross-correlation statistics in univariate as well as multivariate data settings. We review tools for exploratory spatial data analysis and misspecification tests for spatial effects in linear regression models. A discussion of specification strategies and an overview of available software for spatial regression analysis, including their main functionalities, intend to give practitioners of spatial data analysis a head start.

Keywords: spatial econometrics, spatial autocorrelation, spatial heterogeneity, misspecification testing

JEL Classification: C12, C21, C51, R11

Suggested Citation

Florax, Raymond J.G.M. and Nijkamp, Peter, Misspecification in Linear Spatial Regression Models (October 3, 2003). Tinbergen Institute Discussion Papers No. 2003-081/3, Available at SSRN: https://ssrn.com/abstract=459500 or http://dx.doi.org/10.2139/ssrn.459500

Raymond J.G.M. Florax (Contact Author)

Purdue University ( email )

West Lafayette, IN 47907-1145
United States
(765) 494-4300 (Phone)
(765) 494-9176 (Fax)

HOME PAGE: http://web.ics.purdue.edu/~rflorax/

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 444 6092 (Phone)
+31 20 444 6004 (Fax)

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 4446091 (Phone)
+31 20 4445611 (Fax)

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands