Testing for Spatial Correlation under a Complete Bipartite Network

Badi Baltagi and Long Liu
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Long Liu: Department of Economics, Florida Atlantic University, 777 Glades Road, Boca Raton, FL 33431

No 264, Center for Policy Research Working Papers from Center for Policy Research, Maxwell School, Syracuse University

Abstract: This note shows that for a spatial regression with a weight matrix depicting a complete bipartite network, the Moran I test for zero spatial correlation is never rejected when the alternative is positive spatial correlation no matter how large the true value of the spatial correlation coefficient. In contrast, the null hypothesis of zero spatial correlation is always rejected (with probability one asymptotically) when the alternative is negative spatial correlation and the true value of the spatial correlation coefficient is near -1.

Keywords: Spatial Error Model; Moran I Test; Complete Bipartite Network. (search for similar items in EconPapers)
JEL-codes: C12 C21 C31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2024-07
New Economics Papers: this item is included in nep-ecm, nep-net and nep-ure
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Journal Article: Testing for spatial correlation under a complete bipartite network (2024)
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