Random effects specifications in eigenvector spatial filtering: a simulation study

Daisuke Murakami () and Daniel Griffith ()

Journal of Geographical Systems, 2015, vol. 17, issue 4, 331 pages

Abstract: Eigenvector spatial filtering (ESF) is becoming a popular way to address spatial dependence. Recently, a random effects specification of ESF (RE-ESF) is receiving considerable attention because of its usefulness for spatial dependence analysis considering spatial confounding. The objective of this study was to analyze theoretical properties of RE-ESF and extend it to overcome some of its disadvantages. We first compare the properties of RE-ESF and ESF with geostatistical and spatial econometric models. There, we suggest two major disadvantages of RE-ESF: it is specific to its selected spatial connectivity structure, and while the current form of RE-ESF eliminates the spatial dependence component confounding with explanatory variables to stabilize the parameter estimation, the elimination can yield biased estimates. RE-ESF is extended to cope with these two problems. A computationally efficient residual maximum likelihood estimation is developed for the extended model. Effectiveness of the extended RE-ESF is examined by a comparative Monte Carlo simulation. The main findings of this simulation are as follows: Our extension successfully reduces errors in parameter estimates; in many cases, parameter estimates of our RE-ESF are more accurate than other ESF models; the elimination of the spatial component confounding with explanatory variables results in biased parameter estimates; efficiency of an accuracy maximization-based conventional ESF is comparable to RE-ESF in many cases. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Eigenvector spatial filtering; Mixed effects model; Geostatistics; Spatial econometrics; Spatial confounding; C15; C21 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jgeosy:v:17:y:2015:i:4:p:311-331

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DOI: 10.1007/s10109-015-0213-7

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