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Testing for a Common Factor in a Spatial Autoregression Model

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  • P Burridge

    (Department of Economics, University of Warwick, Coventry CV4 7AL, England)

Abstract

Three asymptotically equivalent tests for the presence of a common factor in a spatial autoregression model are presented. When such a common factor exists, the model reduces to the simple regression with spatially correlated disturbances. The tests can thus be used to examine the appropriateness of the latter specification. The procedure is illustrated by application to a model of Irish agricultural consumption discussed by O'Sullivan (1968), and Cliff and Ord (1973).

Suggested Citation

  • P Burridge, 1981. "Testing for a Common Factor in a Spatial Autoregression Model," Environment and Planning A, , vol. 13(7), pages 795-800, July.
    • Handle: RePEc:sae:envira:v:13:y:1981:i:7:p:795-800
    DOI: 10.1068/a130795
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    References listed on IDEAS

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    1. Hendry, David F & Mizon, Grayham E, 1978. "Serial Correlation as a Convenient Simplification, not a Nuisance: A Comment on a Study of the Demand for Money by the Bank of England," Economic Journal, Royal Economic Society, vol. 88(351), pages 549-563, September.
    2. Grayham E. Mizon & David F. Hendry, 1980. "An Empirical Application and Monte Carlo Analysis of Tests of Dynamic Specification," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 21-45.
    3. Berndt, Ernst R & Savin, N Eugene, 1977. "Conflict among Criteria for Testing Hypotheses in the Multivariate Linear Regression Model," Econometrica, Econometric Society, vol. 45(5), pages 1263-1277, July.
    4. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
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