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Diagnostic Tools for Nonlinearity in Spatial Models

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Author Info
Thomas de Graaff (Vrije Universiteit Amsterdam)
Raymond J.G.M. Florax (Vrije Universiteit Amsterdam)
Peter Nijkamp () (Vrije Universiteit Amsterdam)
Aura Reggiani (University of Bologna)

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Abstract

There is an increasing awareness of the potential of nonlinear modeling in regional science, which can partly be explained by the recognition of the limitations of conventional equilibrium models in complex situations and partly by the easy availability and accessibility of sophisticated computational techniques. Among the class of nonlinear models chaos theory stands out as an interesting approach, in which notable progress has been made in economic research. However, the operational significance – in terms of solid empirical tests on chaos – has still been rather limited and a rigorous statistical-econometric treatment of chaos phenomena is still lacking. This paper is concerned with a methodological and empirical analysis of chaos in spatial systems. It seeks to break new research ground by linking the classical diagnostic tools developed in spatial econometrics to nonlinearity tests for empirical data series, in particular the so-called BDS (Brock, Dechert, Scheinkman) test. A spatial variant of the BDS test is developed, and subsequently applied in the context of a shift-share model for Dutch regional labor markets.

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Publisher Info
Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 98-072/3.

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Date of creation: 09 Jul 1998
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Handle: RePEc:dgr:uvatin:19980072

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Web page: http://www.tinbergen.nl/

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Related research
Keywords: chaos theory; misspecification tests; spatial dependence; nonlinearity; shift-share model; regional labor markets;

Find related papers by JEL classification:
C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Hypothesis Testing
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
R23 - Urban, Rural, and Regional Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

References listed on IDEAS
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  1. Theil, Henri & Gosh, Riddhi, 1980. "A comparison of shift-share and the RAS adjustment," Regional Science and Urban Economics, Elsevier, vol. 10(2), pages 175-180, June. [Downloadable!] (restricted)
  2. repec:att:wimass:199520 is not listed on IDEAS
  3. Baumol, William J & Benhabib, Jess, 1989. "Chaos: Significance, Mechanism, and Economic Applications," Journal of Economic Perspectives, American Economic Association, vol. 3(1), pages 77-105, Winter. [Downloadable!] (restricted)
    Other versions:
  4. Scheinkman, Jose A, 1990. "Nonlinearities in Economic Dynamics," Economic Journal, Royal Economic Society, vol. 100(400), pages 33-48, Supplemen. [Downloadable!] (restricted)
  5. Anselin, Luc & Hudak, Sheri, 1992. "Spatial econometrics in practice : A review of software options," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 509-536, September. [Downloadable!] (restricted)
  6. D C Knudsen & R Barff, 1991. "Shift - share analysis as a linear model," Environment and Planning A, Pion Ltd, London, vol. 23(3), pages 421-431, March. [Downloadable!] (restricted)
  7. J.M. Sneek & P. Rietveld, 1997. "Higher Order Spatial ARMA Models," Tinbergen Institute Discussion Papers 97-043/3, Tinbergen Institute.
  8. Stephen Casler, 1989. "A Theoretical Context for Shift and Share Analysis," Regional Studies, Taylor and Francis Journals, vol. 23(1), pages 43-48, February. [Downloadable!] (restricted)
  9. Hordijk, L., 1974. "Spatial correlation in the disturbances of a linear interregional model," Regional and Urban Economics, Elsevier, vol. 4(2), pages 117-140, October. [Downloadable!] (restricted)
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