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Structural interactions in spatial panels

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  • Arnab Bhattacharjee

    ()

  • Sean Holly

Abstract

Until recently, much effort has been devoted to the estimation of panel data regression models without adequate attention being paid to the drivers of diffusion and interaction across cross section and spatial units. We discuss some new methodologies in this emerging area and demonstrate their use in measurement and inferences on cross section and spatial interactions. Specifically, we highlight the important distinction between spatial dependence driven by unobserved common factors and those based on a spatial weights matrix. We argue that, purely factor driven models of spatial dependence may be somewhat inadequate because of their connection with the exchangeability assumption. Limitations and potential enhancements of the existing methods are discussed, and several directions for new research are highlighted.

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File URL: http://hdl.handle.net/10.1007/s00181-010-0396-1
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Bibliographic Info

Article provided by Springer in its journal Empirical Economics.

Volume (Year): 40 (2011)
Issue (Month): 1 (February)
Pages: 69-94

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Handle: RePEc:spr:empeco:v:40:y:2011:i:1:p:69-94

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Related research

Keywords: Cross-sectional and spatial dependence; Spatial weights matrix; Spatial interactions; Monetary policy committee; Generalised method of moments; E42; E43; E50; E58;

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References

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Citations

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Cited by:
  1. Bhattacharjee, Arnab & Holly, Sean, 2009. "Structural Interactions in Spatial Panels," SIRE Discussion Papers 2009-39, Scottish Institute for Research in Economics (SIRE).
  2. Arnab Bhattacharjee & Chris Jensen-Butler, 2011. "Estimation of the Spatial Weights Matrix under Structural Constraints," Dundee Discussion Papers in Economics 254, Economic Studies, University of Dundee.
  3. Bhattacharjee, Arnab & de Castro, Eduardo Anselmo & Marques, João Lourenço, 2011. "Spatial Interactions in Hedonic Pricing Models: The Urban Housing Market of Aveiro, Portugal," SIRE Discussion Papers 2011-45, Scottish Institute for Research in Economics (SIRE).
  4. Sánchez Navarro, Dennis, 2012. "Una propuesta metodológica para la definición de mercados geográficos relevantes
    [A proposed methodology for defining relevant geographic markets]
    ," MPRA Paper 44498, University Library of Munich, Germany.
  5. Bhattacharjee, Arnab & Jensen-Butler, Chris, 2013. "Estimation of the spatial weights matrix under structural constraints," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 617-634.

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