Aggregation of regional economic time series with different spatial correlation structures

Giuseppe Arbia (), Marco Bee and Giuseppe Espa ()

No 720, Department of Economics Working Papers from Department of Economics, University of Trento, Italia

Abstract: In this paper we compare the relative efficiency of different forecasting methods of space-time series when variables are spatially and temporally correlated. We consider the case of a space-time series aggregated into a single time series and the more general instance of a space-time series aggregated into a coarser spatial partition. We extend in various directions the outcomes found in the literature by including the consideration of larger datasets and the treatment of edge effects and of negative spatial correlation. The outcomes obtained provide operational suggestions on how to choose between alternative forecasting methods in empirical circumstances.

Keywords: Spatial correlation; Aggregation; Forecast efficiency; Space�time models; Edge effects; Negative spatial correlation. (search for similar items in EconPapers)
JEL-codes: C15 C21 C43 C53 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-ecm, nep-ets, nep-for, nep-geo and nep-ure
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Citations: View citations in EconPapers (4)

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