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Specification of spatial models: A simulation study on weights matrices

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  • Stanislav Stakhovych
  • Tammo H.A. Bijmolt

Abstract

Abstract The correct specification of spatial models, and especially the choice of the spatial weights matrix, represents a crucial decision for researchers using georeferenced data. However, few guidelines exist on which weights matrix is most appropriate in certain cases. This paper therefore (1) studies the sensitivity of testing and estimating spatial models with different weights matrix specifications and (2) formulates recommendations for researchers applying spatial models regarding model selection and weights matrix specification. The research is based on Monte Carlo simulations with synthetic data. Resumen La correcta especificación de modelos espaciales, y especialmente la elección de la matriz de pesos espaciales, representa una decisión crucial para investigadores que estén utilizando datos georreferenciados. Sin embargo, existen pocas recomendaciones acerca de que matriz de pesos es la más apropiada en ciertos casos. Por tanto este artículo (1) estudia la sensitividad de los ensayos y la estimación de modelos espaciales con especificaciones diferentes de la matriz de pesos y (2) formula recomendaciones para investigadores que estén aplicando modelos espaciales en relación con la elección del modelo y las especificaciones de la matriz de pesos. La investigación está basada en simulaciones de Monte Carlo con datos sintéticos.

Suggested Citation

  • Stanislav Stakhovych & Tammo H.A. Bijmolt, 2009. "Specification of spatial models: A simulation study on weights matrices," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 389-408, June.
  • Handle: RePEc:bla:presci:v:88:y:2009:i:2:p:389-408
    DOI: 10.1111/j.1435-5957.2008.00213.x
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    File URL: https://doi.org/10.1111/j.1435-5957.2008.00213.x
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    References listed on IDEAS

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    1. F Stetzer, 1982. "Specifying weights in spatial forecasting models: the results of some experiments," Environment and Planning A, Pion Ltd, London, vol. 14(5), pages 571-584, May.
    2. Florax, Raymond J. G. M. & Folmer, Hendrik & Rey, Sergio J., 2003. "Specification searches in spatial econometrics: the relevance of Hendry's methodology," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 557-579, September.
    3. Henk Folmer & Johan Oud, 2008. "How to get rid of W: a latent variables approach to modelling spatially lagged variables," Environment and Planning A, Pion Ltd, London, vol. 40(10), pages 2526-2538, October.
    4. F Stetzer, 1982. "Specifying Weights in Spatial Forecasting Models: The Results of Some Experiments," Environment and Planning A, , vol. 14(5), pages 571-584, May.
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    7. Hamparsum Bozdogan, 1987. "Model selection and Akaike's Information Criterion (AIC): The general theory and its analytical extensions," Psychometrika, Springer;The Psychometric Society, vol. 52(3), pages 345-370, September.
    8. Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
    9. Anselin, Luc, 2002. "Under the hood : Issues in the specification and interpretation of spatial regression models," Agricultural Economics, Blackwell, vol. 27(3), pages 247-267, November.
    10. Kelejian, Harry H. & Robinson, Dennis P., 1998. "A suggested test for spatial autocorrelation and/or heteroskedasticity and corresponding Monte Carlo results," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 389-417, July.
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