Ecological inference and spatial heterogeneity: an entropy‐based distributionally weighted regression approach*

Ludo Peeters and Coro Chasco Yrigoyen

Papers in Regional Science, 2006, vol. 85, issue 2, 257-276

Abstract: Abstract. In this article we compare two competing approaches to ecological modelling using test data. The first approach is based on the “traditional” method of Ordinary Least Squares (OLS), assuming constancy of parameters across disaggregated spatial units (spatial homogeneity). The second (new) approach is based on the method of Generalised Cross‐Entropy (GCE), assuming varying parameters (spatial heterogeneity). The latter approach is designated as entropy‐based “distributionally weighted regression” (DWR). The two approaches are tested in a real‐world application, using data on per‐capita GDP for the 17 regions and some covariates for the 50 provinces of Spain. Specifically, the performances of the two approaches are assessed by examining their capability in tracking the actual per‐capita GDP data for the provinces (while treating them as if they were not observed by the econometrician), and in showing evidence of spatial heterogeneity. Our findings indicate that the GCE varying‐parameter approach outperforms the OLS approach in terms of predictive power. Specifically, we find that the GCE predictions make efficient use of the lower‐level information that is available. In addition, it is shown that entropy‐based DWR has some potential as a useful technique for investigating spatially heterogeneous relationships at the lower level of analysis that might otherwise be overlooked.

Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://doi.org/10.1111/j.1435-5957.2006.00082.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:presci:v:85:y:2006:i:2:p:257-276

Access Statistics for this article

Papers in Regional Science is currently edited by Jouke van Dijk

More articles in Papers in Regional Science from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().