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Estimation of spatial models with endogenous weighting matrices, and an application to a demand model for cigarettes

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  • Kelejian, Harry H.
  • Piras, Gianfranco

Abstract

Weighting matrices are typically assumed to be exogenous. However, in many cases this exogeneity assumption may not be reasonable. In these cases, typical model specifications and corresponding estimation procedures will no longer be valid. In this paper we specify a reasonably general spatial panel data model which contains a spatially lagged dependent variable in terms of an endogenous weighting matrix.

Suggested Citation

  • Kelejian, Harry H. & Piras, Gianfranco, 2014. "Estimation of spatial models with endogenous weighting matrices, and an application to a demand model for cigarettes," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 140-149.
  • Handle: RePEc:eee:regeco:v:46:y:2014:i:c:p:140-149
    DOI: 10.1016/j.regsciurbeco.2014.03.001
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    References listed on IDEAS

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