CRIEFF Discussion Paper Number 0519
Estimation of Spatial Weights Matrix in a Spatial
Error Model, with an Application to Diffusion in Housing Demand
Arnab Bhattacharjee (University of St. Andrews) and Chris Jensen-Butler (University of St. Andrews)
Abstract
This paper proposes a methodology for estimation of
spatial weights matrices which are consistent with a given or estimated pattern
of spatial autocovariance. This approach is
potentially useful for applications in urban, environmental, development,
growth and other areas of economics where there is uncertainty regarding the
nature or spatial (or cross-sectional) interaction between regions (or economic
agents). The proposed methodology is applied to housing markets in England and
Wales and several new hypotheses are advanced about the social and economic
forces that determine spatial diffusion in housing demand.
JEL Classifications
C14; C15; C30; C31; R21; R31.
Keywords
Spatial econometrics; Spatial autocorrelation; Spatial
weights matrix, Spatial error model; Housing demand.
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