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A note on testing for spatial error components

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  • Carriazo, Fernando
  • Coulson, Edward

Abstract

The two tests for spatial error components are the Kelejian-Robinson (KR) test and the LM test developed by Anselin (2001). We develop a new form for the LM test which facilitates comparisons to the KR test, and show why the LM test is superior. We develop a second test in the spirit of KR which overcomes this particular shortcoming, but in fact incurs a second shortcoming which renders it inferior even to the original KR test. We discuss this failure as well.

Suggested Citation

  • Carriazo, Fernando & Coulson, Edward, 2010. "A note on testing for spatial error components," Regional Science and Urban Economics, Elsevier, vol. 40(5), pages 331-335, September.
    • Handle: RePEc:eee:regeco:v:40:y:2010:i:5:p:331-335
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    1. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    2. Anselin, Luc & Moreno, Rosina, 2003. "Properties of tests for spatial error components," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 595-618, September.
    3. Harry H. Kelejian & Dennis P. Robinson, 1993. "A Suggested Method Of Estimation For Spatial Interdependent Models With Autocorrelated Errors, And An Application To A County Expenditure Model," Papers in Regional Science, Wiley Blackwell, vol. 72(3), pages 297-312, July.
    4. Harry H. Kelejian & Dennis P. Robinson, 1995. "Spatial Correlation: A Suggested Alternative to the Autoregressive Model," Advances in Spatial Science, in: Luc Anselin & Raymond J. G. M. Florax (ed.), New Directions in Spatial Econometrics, chapter 3, pages 75-95, Springer.
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    Cited by:

    1. Giuseppe Arbia, 2011. "A Lustrum of SEA: Recent Research Trends Following the Creation of the Spatial Econometrics Association (2007--2011)," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(4), pages 377-395, July.

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