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Investigating the predictive capabilities of discrete choice models in the presence of spatial effects

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  • Richard D. Robertson
  • Gerald C. Nelson
  • Alessandro De Pinto

Abstract

Fully spatial treatments of discrete choice models are difficult to specify and can be computationally intense. Several ad hoc procedures have been proposed in the land use literature to mitigate the potential estimation problems caused by spatial effects. We investigate the consequences of different spatial effects for several of these non‐fully‐spatial approaches using Monte Carlo simulation of a binary choice and a real world example of land use on the island of Sumatra in Indonesia. We find that there are few effects on categorical prediction and that inclusion of spatially lagged explanatory variables is the most effective procedure. Resumen Los enfoques totalmente espaciales de modelos de elección discreta son difíciles de especificar y su cálculo puede ser muy laborioso. En la literatura sobre uso del suelo se han propuesto varios procedimientos para el caso con el fin de mitigar los posibles problemas de estimación causados por efectos espaciales. Investigamos las consecuencias de diferentes efectos espaciales para varios de estos enfoques no totalmente espaciales, utilizando simulación de Monte Carlo de elección binaria y un ejemplo del mundo real de uso del suelo en la isla de Sumatra en Indonesia. Encontramos que existen pocos efectos sobre la predicción categórica y que la incorporación de variables explicativas espacialmente desfasadas es el procedimiento más efectivo.

Suggested Citation

  • Richard D. Robertson & Gerald C. Nelson & Alessandro De Pinto, 2009. "Investigating the predictive capabilities of discrete choice models in the presence of spatial effects," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 367-388, June.
    • Handle: RePEc:bla:presci:v:88:y:2009:i:2:p:367-388
    DOI: 10.1111/j.1435-5957.2009.00247.x
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    2. Villoria, Nelson B. & Liu, Jing, 2018. "Using spatially explicit data to improve our understanding of land supply responses: An application to the cropland effects of global sustainable irrigation in the Americas," Land Use Policy, Elsevier, vol. 75(C), pages 411-419.
    3. Avery S. Cohn & Juliana Gil & Thomas Berger & Heitor Pellegrina & Chantal Toledo, "undated". "Patterns and Processes of Pasture to Crop Conversion in Brazil: Evidence from Mato Grosso State," Mathematica Policy Research Reports 8ce99775615f42b98ff43f530, Mathematica Policy Research.
    4. Levente Tímár, 2011. "Rural Land Use and Land Tenure in New Zealand," Working Papers 11_13, Motu Economic and Public Policy Research.
    5. T. Randall Fortenbery & Steven C. Deller & Lindsay Amiel, 2013. "The Location Decisions of Biodiesel Refineries," Land Economics, University of Wisconsin Press, vol. 89(1), pages 118-136.
    6. Michael Brady & Elena Irwin, 2011. "Accounting for Spatial Effects in Economic Models of Land Use: Recent Developments and Challenges Ahead," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(3), pages 487-509, March.
    7. JunJie Wu & Monica Fisher & Unai Pascual, 2011. "Urbanization and the Viability of Local Agricultural Economies," Land Economics, University of Wisconsin Press, vol. 87(1), pages 109-125.

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