Estimation of spatial autoregressive models with boundary specification problem
Zhengyu Zhang and
Economics Letters, 2013, vol. 118, issue 1, 130-134
This article examines the impact of the boundary specification problem upon the estimation of spatial autoregressive models within an instrumental variable (IV) framework. We show the usual IV estimator remains consistent and asymptotically normal, but incurs an asymptotic bias of order Op(n2/ν), where n2 is the number of boundary units and ν is the total sample size. Our results show some promise for IV based inference even in the presence of the boundary problem.
Keywords: Spatial autoregression; Social network; Missing data; Instrumental variable (search for similar items in EconPapers)
JEL-codes: C13 C21 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:1:p:130-134
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