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Mostly pointless spatial econometrics?

Gibbons, Steve and Overman, Henry G. (2010) Mostly pointless spatial econometrics? SERC Discussion Papers, SERCDP0061. Spatial Economics Research Centre (SERC), London, UK.

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We argue that identification problems bedevil most applied spatial research. Spatial econometrics solves these problems by deriving estimators assuming that functional forms are known and by using model comparison techniques to let the data choose between competing specifications. We argue that in most situations of interest this, at best, achieves only very weak identification. Worse, in most cases, such an approach will simply be uninformative about the economic processes at work rendering much applied spatial econometric research ‘pointless’, unless the main aim is simply description of the data. We advocate an alternative approach based on the ‘experimental paradigm’ which puts issues of identification and causality at centre stage.

Item Type: Monograph (Working Paper)
Official URL:
Additional Information: © 2010 Steve Gibbons and Henry G. Overman
Library of Congress subject classification: G Geography. Anthropology. Recreation > G Geography (General)
H Social Sciences > HC Economic History and Conditions
Journal of Economic Literature Classification System: O - Economic Development, Technological Change, and Growth > O1 - Economic Development
Sets: Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Identification Number: SERCDP0061
Date Deposited: 28 Mar 2011 10:29

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