Spatial Econometric Specification and Estimation

Part of the Contributions to Economics book series (CE, volume 1)


The theoretical model laid out in Part II can be directly translated to a spatial econometric model specification, with output growth as the dependent variable, and two explanatory variables, which are also lagged in space, thus making a total of four independent variables, and in addition there are a constant and a spatially correlated term. The method of ordinary least squares would cause inefficient results in such a specification, but estimation using the method of maximum likelihood overcomes this problem.


Explanatory Variable Spatial Weight Matrix Common Border Spatial Durbin Model Common Factor Model 


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© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  1. 1.Department of SocioeconomicsVienna University of Economics and Business, Institute for Economic Geography and GIScienceViennaAustria

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