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Bayesian Methods for Completing Data in Spatial Models


Author Info

  • Wolfang Polasek

    (Institute for Advanced Studies, Stumpergasse 56, 1060 Vienna, Austria, and University of Porto, Rua Campo Alegre, Portugal)

  • Carlos Llano

    (Universidad Autonoma de Madrid, Facultad de Ciencias Economicas y Empresariales, Departamento de Analisis Economico, 28049 Madrid)

  • Richard Sellner

    (Institute for Advanced Studies, Stumpergasse 56, 1060 Vienna, Austria)


Completing data sets that are collected in heterogeneous units is a quite frequent problem. Chow and Lin (1971) were the first to develop a unified framework for the three problems (interpolation, extrapolation and distribution) of predicting times series by related series (the 'indicators'). This paper develops a spatial Chow-Lin procedure for cross-sectional data and compares the classical and Bayesian estimation methods. We outline the error co- variance structure in a spatial context and derive the BLUE for ML and Bayesian MCMC estimation. In an example, we apply the procedure to Spanish regional GDP data between 2000 and 2004. We assume that only NUTS-2 GDP is known and predict GDP at NUTS-3 level by using socio-economic and spatial information available at NUTS-3. The spatial neighborhood is defined by either km distance, travel time, contiguity or trade relation- ships. After running some sensitivity analysis, we present the forecast accuracy criteria comparing the predicted values with the observed ones.

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Bibliographic Info

Article provided by Rimini Centre for Economic Analysis in its journal Review of Economic Analysis.

Volume (Year): 2 (2010)
Issue (Month): 2 (June)
Pages: 194-214

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Handle: RePEc:ren:journl:v:2:y:2010:i:2:p:194-214

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Related research

Keywords: Interpolation; Spatial Econometrics; MCMC; Spatial Chow-Lin; Missing Re- gional Data; Spatial Autoregression; Forecasting by MCMC; NUTS: Nomenclature of Ter- ritorial Units for Statistics;

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Cited by:
  1. Wolfgang Polasek & Richard Sellner, 2013. "The Does Globalization Affect Regional Growth? Evidence for NUTS-2 Regions in EU-27," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 1, pages 23-65, March.
  2. Wolfgang Polasek & Richard Sellner, 2011. "Does Globalization affect Regional Growth? Evidence for NUTS-2 Regions in EU-27," Working Paper Series, The Rimini Centre for Economic Analysis 24_11, The Rimini Centre for Economic Analysis.
  3. Joanna Horabik & Zbigniew Nahorski, 2014. "Improving resolution of a spatial air pollution inventory with a statistical inference approach," Climatic Change, Springer, vol. 124(3), pages 575-589, June.


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