Estimation of the Spatial Weights Matrix under Structural Constraints

Arnab Bhattacharjee, Chris Jensen-Butler

    Research output: Working paperDiscussion paper

    104 Downloads (Pure)

    Abstract

    While estimates of models with spatial interaction are very sensitive to the choice of spatial weights, considerable uncertainty surrounds definition of spatial weights in most studies with cross-section dependence. We show that, in the spatial error model the spatial weights matrix is only partially identified, and is fully identified under the structural constraint of symmetry. For the spatial error model, we propose a new methodology for estimation of spatial weights under the assumption of symmetric spatial weights, with extensions to other important spatial models. The methodology is applied to regional housing markets in the UK, providing an estimated spatial weights matrix that generates several new hypotheses about the economic and socio-cultural drivers of spatial diffusion in housing demand.
    Original languageEnglish
    Place of PublicationDundee
    PublisherEconomic Studies, University of Dundee
    Number of pages45
    Publication statusPublished - 2011

    Publication series

    NameDundee DiscussionPapers in Economics
    PublisherDepattment of Economic Studies, University of Dundee
    No.254
    ISSN (Print)1473-236X

    Keywords

    • Spatial econometrics
    • Spatial autocorrelation
    • spatial weights matrix
    • Spatial error model
    • Housing demand
    • Gradient projection

    Fingerprint Dive into the research topics of 'Estimation of the Spatial Weights Matrix under Structural Constraints'. Together they form a unique fingerprint.

  • Research Output

    • 1 Discussion paper

    Estimation of the Spatial Weights Matrix under Structural Constraints

    Bhattacharjee, A. & Jensen-Butler, C., 2011, St. Andrews: Scottish Institute for Research in Economics , (SIRE Discussion Papers; no. 2011-48).

    Research output: Working paperDiscussion paper

    Open Access
    File
  • Cite this

    Bhattacharjee, A., & Jensen-Butler, C. (2011). Estimation of the Spatial Weights Matrix under Structural Constraints. (Dundee DiscussionPapers in Economics; No. 254). Economic Studies, University of Dundee. http://ideas.repec.org/p/dun/dpaper/254.html