Incorporating Transportation Network Structure in Spatial Econometric Models of Commodity Flows
AbstractWe introduce a regression-based gravity model for commodity flows between 35 regions in Austria. We incorporate information regarding the highway network into the spatial connectivity structure of the spatial autoregressive econometric model. We find that our approach produces improved model fit and higher likelihood values. The model accounts for spatial dependence in the origin-destination flows by introducing a spatial connectivity matrix that allows for three types of spatial dependence in the origins to destinations flows. We modify this origin-destination connectivity structure that was introduced by LeSage and Pace (2005) to include information regarding the presence or absence of a major highway/train corridor that passes through the regions. Empirical estimates indicate that the strongest spatial autoregressive effects arise when both origin and destination regions have neighboring regions located on the highway network. Our approach provides a formal spatial econometric methodology that can easily incorporate network connectivity information in spatial autoregressive models.
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Bibliographic InfoPaper provided by Institute for Advanced Studies in its series Economics Series with number 188.
Length: 34 pages
Date of creation: May 2006
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Other versions of this item:
- James Paul Lesage & Wolfgang Polasek, 2008. "Incorporating Transportation Network Structure in Spatial Econometric Models of Commodity Flows," Spatial Economic Analysis, Taylor & Francis Journals, vol. 3(2), pages 225-245.
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
- L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-05-13 (All new papers)
- NEP-GEO-2006-05-13 (Economic Geography)
- NEP-NET-2006-05-13 (Network Economics)
- NEP-URE-2006-05-13 (Urban & Real Estate Economics)
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