IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa10p487.html
   My bibliography  Save this paper

Seemingly Unrelated Regressions with Spatial Effects. An Application to the Case of the European Regional Employment

Author

Listed:
  • Ana Angulo
  • Fernando Lopèz
  • Jèsus Mur

Abstract

The seemingly unrelated regressions (SUR) equations are a traditional multivariate econometric formulation employed in very different fields including, obviously, spatial analysis. The basis of the approach is very well known due to the initial works of Zellner (1962), Theil (1971), Malinvaud (1970), Schmidt (1976) and Dwivedi and Srivastava (1978). In this paper, we address the case of a SUR model that involves spatial effects, under the configuration of a given number of equations, G, a finite number of crosssections, T, and a large number of spatial units, R. The problem that we pose is testing for the presence of spatial effects, as in Mur and López (2008), and to select the most adequate spatial model for the data, as in Mur et al (2010). Following these papers, we also assume a maximum-likelihood framework that facilitates the obtaining of simple Lagrange Multipliers, with good behaviour in small-sized samples. Then, we focus on the assumption of constancy (among equations, between cross-sections) of the parameters of spatial dependence. In a standard framework, these coefficients are allowed to vary between equations but not in time. In general terms, this is an unnecessary assumption to start with the econometric modelling. For this reason, we extend the discussion to the problem of the instability of the coefficients of crosssectional dependence, both in a spatial dimension and among equations. We present the results of a small Monte Carlo experiment to study the behaviour of the Lagrange Multipliers developed in order to analyze the assumption of parameter stability. Finally, an application of these techniques to the case of the European regional employment, at NUTS II level and disaggregated by sectors of activity, in the period 1980 to 2008, is also included. We specify a SUR model where each equation corresponds to a sector of activity. Provisional results indicate that there exist strong symptoms of instability in the spatial structure of the equations, although this structure appears to be stable in time.

Suggested Citation

  • Ana Angulo & Fernando Lopèz & Jèsus Mur, 2011. "Seemingly Unrelated Regressions with Spatial Effects. An Application to the Case of the European Regional Employment," ERSA conference papers ersa10p487, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa10p487
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper487.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Julie Le Gallo & Sandy Dall’erba, 2006. "Evaluating the Temporal and Spatial Heterogeneity of the European Convergence Process, 1980–1999," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 269-288, May.
    2. Brülhart, Marius & Mathys, Nicole A., 2008. "Sectoral agglomeration economies in a panel of European regions," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 348-362, July.
    3. Julie Le Gallo & Coro Chasco, 2009. "Spatial analysis of urban growth in Spain, 1900–2001," Studies in Empirical Economics, in: Giuseppe Arbia & Badi H. Baltagi (ed.), Spatial Econometrics, pages 59-80, Springer.
    4. Francesco Moscone & Elisa Tosetti & Martin Knapp, 2007. "Sur model with spatial effects: an application to mental health expenditure," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1403-1408.
    5. Peter Egger & Michael Pfaffermayr, 2004. "Distance, trade and FDI: a Hausman-Taylor SUR approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(2), pages 227-246.
    6. Sergio Rey & Brett Montouri, 1999. "US Regional Income Convergence: A Spatial Econometric Perspective," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 143-156.
    7. Bernard Fingleton, 2007. "A multi-equation spatial econometric model, with application to EU manufacturing productivity growth," Journal of Geographical Systems, Springer, vol. 9(2), pages 119-144, June.
    8. Ronald Bewley & Trevor Young, 1987. "Applying Theil's Multinomial Extension of the Linear Logit Model to Meat Expenditure Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(1), pages 151-157.
    9. Francesco Moscone & Elisa Tosetti & Martin Knapp, 2007. "Sur model with spatial effects: an application to mental health expenditure," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1403-1408, December.
    10. Jorgen Lauridsen & Mickael Bech & Fernando López & Mariluz Sánchez, 2010. "A spatiotemporal analysis of public pharmaceutical expenditure," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(2), pages 299-314, April.
    11. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fernando A. López & Román Mínguez & Jesús Mur, 2020. "ML versus IV estimates of spatial SUR models: evidence from the case of Airbnb in Madrid urban area," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(2), pages 313-347, April.
    2. Jesús Mur & Fernando López & Marcos Herrera, 2010. "Testing for Spatial Effects in Seemingly Unrelated Regressions," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(4), pages 399-440.
    3. Fernando López & Jesús Mur & Ana Angulo, 2014. "Spatial model selection strategies in a SUR framework. The case of regional productivity in EU," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 197-220, August.
    4. Mendiola, Lorea & González, Pilar, 2018. "Temporal dynamics in the relationship between land use factors and modal split in commuting: A local case study," Land Use Policy, Elsevier, vol. 77(C), pages 267-278.
    5. Chuanhua Wei & Chao Liu & Fengyun Gui, 2017. "Geographically weight seemingly unrelated regression (GWSUR): a method for exploring spatio-temporal heterogeneity," Applied Economics, Taylor & Francis Journals, vol. 49(42), pages 4189-4195, September.
    6. Breandán Ó'hUallacháin, 2008. "Regional growth transition clubs in the United States," Papers in Regional Science, Wiley Blackwell, vol. 87(1), pages 33-53, March.
    7. Gema Fernández-Avilés Calderón, 2009. "Spatial Regression Analysis vs. Kriging Methods for Spatial Estimation," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 15(1), pages 44-58, February.
    8. Marcelo Castro & Enlinson Mattos & Fernanda Patriota, 2021. "The effects of health spending on the propagation of infectious diseases," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2323-2344, September.
    9. Julie Le Gallo & Sandy Dall'erba, 2008. "Spatial and sectoral productivity convergence between European regions, 1975–2000," Papers in Regional Science, Wiley Blackwell, vol. 87(4), pages 505-525, November.
    10. Márcio Poletti Laurini, 2017. "A spatial error model with continuous random effects and an application to growth convergence," Journal of Geographical Systems, Springer, vol. 19(4), pages 371-398, October.
    11. Maarten Goos & Joep Konings & Marieke Vandeweyer, 2015. "Employment Growth in Europe: The Roles of Innovation, Local Job Multipliers and Institutions," Working Papers of Department of Economics, Leuven 547246, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    12. Maarten Bosker & Waldo Krugell, 2008. "Regional Income Evolution In South Africa After Apartheid," Journal of Regional Science, Wiley Blackwell, vol. 48(3), pages 493-523, August.
    13. Toni Mora & Rosina Moreno, 2010. "Specialisation changes in European regions: the role played by externalities across regions," Journal of Geographical Systems, Springer, vol. 12(3), pages 311-334, September.
    14. Cavalieri, Marina & Di Caro, Paolo & Guccio, Calogero & Lisi, Domenico, 2020. "Does neighbours' grass matter? Testing spatial dependent heterogeneity in technical efficiency of Italian hospitals," Social Science & Medicine, Elsevier, vol. 265(C).
    15. Burton, Michael & Young, Trevor, 1990. "Changes in Consumer Preferences For Meat in Great Britain: Non-Parametric and Parametric Analysis," Manchester Working Papers in Agricultural Economics 232820, University of Manchester, School of Economics, Agricultural Economics Department.
    16. Angulo, Ana Maria & Mtimet, Nadhem & Gil, Jose Maria, 2008. "Análisis de la demanda de alimentos en España considerando el impacto de la dieta sobre la salud," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 8(02), pages 1-28.
    17. M. Simona Andreano & Roberto Benedetti & Paolo Postiglione, 2017. "Spatial regimes in regional European growth: an iterated spatially weighted regression approach," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(6), pages 2665-2684, November.
    18. Abderraouf Laajimi & Boubaker Dhehibi & José Maria Gil, 2003. "The structure of food demand in Tunisai: a differential system approach," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 66, pages 55-77.
    19. Julie Le Gallo & Yiannis Kamarianakis, 2011. "The Evolution of Regional Productivity Disparities in the European Union from 1975 to 2002: A Combination of Shift-Share and Spatial Econometrics," Regional Studies, Taylor & Francis Journals, vol. 45(1), pages 123-139.
    20. Alexandra SCHAFFAR, 2008. "Regional Income Inequality And Urbanisation Trends In China: 1978-2005," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 28, pages 87-110.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa10p487. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.ersa.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.