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A spatial Durbin Type-III Tobit model with an application

Author

Listed:
  • Bao, Yong
  • Liu, Xiaotian
  • Zhou, Xiaoyan

Abstract

This study proposes a Bayesian Markov Chain Monte Carlo algorithm for estimating a spatial Durbin Type-III Tobit model. Simulations show that the Bayesian approach performs well in finite samples and may be preferred over maximum likelihood estimation method when the datasets are large and the number of covariates is high. Applying the model to cereal production in Southeast Asia, we find that climate change reduces cereal yields, but accounting for spillovers from neighboring temperature, precipitation, and soil conditions moderates the estimated damages. More broadly, the results suggest that assessing risks to crop yields and designing related policies should account for spillover effects, not conditions alone.

Suggested Citation

  • Bao, Yong & Liu, Xiaotian & Zhou, Xiaoyan, 2026. "A spatial Durbin Type-III Tobit model with an application," Economic Modelling, Elsevier, vol. 164(C).
    • Handle: RePEc:eee:ecmode:v:164:y:2026:i:c:s0264999326003147
    DOI: 10.1016/j.econmod.2026.107785
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    Keywords

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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