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Interpretation of structural parameters for models with spatial autoregression

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  • Michal Bernard Pietrzak

    () (Nicolaus Copernicus University, Poland)

Abstract

The main purpose of the article is to consider a important issue of spatial econometrics which is a proper interpretation of structural parameters of econometric models with spatial autoregression. The problem will be considered based on the example of the spatial SAR model. Another purpose of the article is to make an overview of measures of average spatial impact proposed by the subject literature (see Lesage and Pace 2009). The analysis will include such measures as Average Total Impact to an Observation, Average Total Impact from an Observation, Average Indirect Impact to an Observation, Average Indirect Impact from an Observation and Average Direct Impact. Having considered the above issues, I will introduce a set of three original measures that allow interpretation of the strength of the impact of the explanatory processes within the spatial SAR model which take the forms of average direct impact, average indirect impact and average induced impact. The use of this set of measures will be illustrated with the example of the analysis of the unemployment rate in Poland. It must be emphasized that the presented set of measures may also be designated for other spatial models. With the knowledge of the empirical form of the model and of the spatial weight matrix, the set of measures introduced simplifies significantly the complex procedure of the interpretation of the structural parameters for spatial models to the use of merely three values.

Suggested Citation

  • Michal Bernard Pietrzak, 2013. "Interpretation of structural parameters for models with spatial autoregression," Working Papers 32/2013, Institute of Economic Research, revised May 2013.
  • Handle: RePEc:pes:wpaper:2013:no32
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    Cited by:

    1. repec:mje:mjejnl:v:12:y:2016:i:3:p:69-86 is not listed on IDEAS
    2. Michal Bernard Pietrzak, 2014. "Redefining The Modifiable Areal Unit Problem Within Spatial Econometrics, The Case Of The Aggregation Problem," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 9(3), pages 131-151, September.
    3. Michal Bernard Pietrzak, 2016. "The Problem of the Inclusion of Spatial Dependence Within the TOPSIS Method," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 12(3), pages 69-86.
    4. Michal Bernard Pietrzak, 2014. "Redefining The Modifiable Areal Unit Problem Within Spatial Econometrics, The Case Of The Scale Problem," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 9(2), pages 111-132, June.
    5. Miroslaw Biczkowski & Iwona Müller-Fraczek & Joanna Muszynska & Michal Bernard Pietrzak & Justyna Wilk, 2014. "The Delimitation Of Bipolar Metropolitan Area Within The Kujawsko-Pomorskie Region," Oeconomia Copernicana, Institute of Economic Research, vol. 5(2), pages 101-122, June.

    More about this item

    Keywords

    spatial econometrics; measures of average impact; SAR model; SDM model; spatial autocorrelation;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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