Spatial Regression-Based Model Specifications for Exogenous and Endogenous Spatial Interaction

Spatial interaction models represent a class of models that are used for modeling origin-destination flow data. The interest in such models is motivated by the need to understand and explain the flows of tangible entities such as persons or commodities or intangible ones such as capital, information or knowledge between regions. These models attempt to explain interaction between origin and destination regions using (i) origin-specific attributes characterizing the ability of the origins to generate flows, (ii) destination-specific characteristics representing the attractiveness of destinations, and (iii) variables that characterize the way spatial separation of origins from destinations constrains or impedes the interaction. They implicitly assume that using spatial separation variables such as distance between origin and destination regions will eradicate the spatial dependence among the sample of spatial flows.