Spatial Growth Regressions: Model Specification, Estimation and Interpretation

James P. LeSage, Manfred M. Fischer

    Publication: Working/Discussion Paper

    Abstract

    This paper uses Bayesian model comparison methods to simultaneously specify both the
    spatial weight structure and explanatory variables for a spatial growth regression involving
    255 NUTS 2 regions across 25 European countries. In addition, a correct interpretation of
    the spatial regression parameter estimates that takes into account the simultaneous feed-
    back nature of the spatial autoregressive model is provided. Our findings indicate that
    incorporating model uncertainty in conjunction with appropriate parameter interpretation
    decreased the importance of explanatory variables traditionally thought to exert an important influence on regional income growth rates.
    Original languageEnglish
    Place of PublicationVienna
    PublisherWU Vienna University of Economics and Business
    Publication statusPublished - 1 Apr 2007

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