Model uncertainty in matrix exponential spatial growth regression models
AbstractThis paper considers the problem of model uncertainty associated with variable selection and specification of the spatial weight matrix in spatial growth regression models in general and growth regression models based on the matrix exponential spatial specification in particular. A natural solution, supported by formal probabilistic reasoning, is the use of Bayesian model averaging which assigns probabilities on the model space and deals with model uncertainty by mixing over models, using the posterior model probabilities as weights. This paper proposes to adopt Bayesian information criterion model weights since they have computational advantages over fully Bayesian model weights. The approach is illustrated for both identifying model covariates and unveiling spatial structures present in pan-European growth data.
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Bibliographic InfoPaper provided by Vienna University of Economics, Department of Economics in its series Department of Economics Working Papers with number wuwp158.
Date of creation: Oct 2013
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model comparison; model uncertainty; spatial Durbin matrix exponential growth models; spatial weight structures; European regions;
Find related papers by JEL classification:
- C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-22 (All new papers)
- NEP-ECM-2013-11-22 (Econometrics)
- NEP-FDG-2013-11-22 (Financial Development & Growth)
- NEP-GEO-2013-11-22 (Economic Geography)
- NEP-URE-2013-11-22 (Urban & Real Estate Economics)
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