Herrera Gómez, Marcos and Mur Lacambra, Jesús and Ruiz Marín, Manuel
(2012):
*Selecting the Most Adequate Spatial Weighting Matrix:A Study on Criteria.*

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## Abstract

In spatial econometrics, it is customary to specify a weighting matrix, the so-called W matrix, by choosing one matrix from a finite set of matrices. The decision is extremely important because, if the W matrix is misspecified, the estimates are likely to be biased and inconsistent. However, the procedure to select W is not well defined and, usually, it reflects the judgments of the user. In this paper, we revise the literature looking for criteria to help with this problem. Also, a new nonparametric procedure is introduced. Our proposal is based on a measure of the information, conditional entropy. We compare these alternatives by means of a Monte Carlo experiment.

Item Type: | MPRA Paper |
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Original Title: | Selecting the Most Adequate Spatial Weighting Matrix:A Study on Criteria |

Language: | English |

Keywords: | Spatial weighting matrix; Nonparametric procedure; Conditional entropy |

Subjects: | C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C52 - Model Evaluation, Validation, and Selection |

Item ID: | 73700 |

Depositing User: | marcos herrera |

Date Deposited: | 15 Sep 2016 10:43 |

Last Modified: | 26 Sep 2019 11:43 |

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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/73700 |