Spatial Econometric Specification and Estimation
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.
KeywordsExplanatory Variable Spatial Weight Matrix Common Border Spatial Durbin Model Common Factor Model
- Anselin L (1988) Spatial econometrics: methods and models. Kluwer, Dordrecht, Boston and LondonGoogle Scholar
- Anselin L (2001) Spatial econometrics. In: Baltagi, BH (ed) A companion to theoretical econometrics. Blackwell, Malden, MAGoogle Scholar
- Anselin L (2006) Spatial econometrics. In: Mills, T and Patterson, K (eds) Palgrave handbook of econometrics. Palgrave Macmillan, Hampshire and New York, NYGoogle Scholar
- Le Gallo J, Ertur C, Baumont C (2003) A spatial econometric analysis of convergence across European regions, 1980–1995. In: Fingleton, B (ed) European regional growth. Springer, Berlin, Heidelberg and New York, NYGoogle Scholar