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Maps Of Continuous Spatial Dependence

Author

Listed:
  • Fernando LOPEZ

    (Department of Quantitative Methods and Computing, Technical University of Cartagena (Spain))

  • Ana ANGULO

    (Department of Economic Analysis, University of Zaragoza (Spain))

  • Jesús MUR

    (Department of Economic Analysis, University of Zaragoza (Spain))

Abstract

Heterogeneity is one of the distinguishing features in spatial econometric models. It is a frequent problem in applied work and can be very damaging for statistical inference. In this paper, we focus on the problems implied by the existence of instabilities in the mechanism of spatial dependence in a spatial lag model, assuming that the other terms of the specification remain stable. We begin the discussion with the role played by the algorithms of local estimation in detecting the instabilities. Problems appear when one must decide what to do once the existence of heterogeneity has been confirmed. The logical reaction is trying to parameterize this lack of stability. However, the solution is not obvious. Assuming that a set of indicators related to the problem has been identified, we propose a simple technique to deal with the unknown functional form. In the final part of the paper, we present some Monte Carlo evidence and an application to evaluate the instability in the mechanisms of spatial dependence in the convergence process of the European Regions.

Suggested Citation

  • Fernando LOPEZ & Ana ANGULO & Jesús MUR, 2009. "Maps Of Continuous Spatial Dependence," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 30, pages 11-34.
    • Handle: RePEc:tou:journl:v:30:y:2009:p:11-34
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    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.
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    Citations

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    Cited by:

    1. Chasco, Coro & Le Gallo, Julie & López, Fernando A., 2018. "A scan test for spatial groupwise heteroscedasticity in cross-sectional models with an application on houses prices in Madrid," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 226-238.
    2. Jesús Mur & Fernando López & Ana Angulo, 2010. "Instability in spatial error models: an application to the hypothesis of convergence in the European case," Journal of Geographical Systems, Springer, vol. 12(3), pages 259-280, September.

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    More about this item

    Keywords

    DEPENDENCE; LOCAL ESTIMATION; MONTE-CARLO; SPATIAL INSTABILITY;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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