Local and regional spatial interactions of Norwegian farm growth

Hugo Storm and Thomas Heckelei

No 235576, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: A major challenge in the analysis of micro level spatial interaction is to distinguish actual interactions from the effects of spatially correlated omitted variables. We approach this problem by considering a spatially lagged explanatory model (SLX) employing two spatial weighting matrices differentiating between local and regional neighbourhoods. We empirically analyse spatial interaction between individual farms in Norway and additionally perform Monte Carlo simulations exploring the model’s performance under different data settings. Results show that including two spatial weighting matrices can indeed reduce the bias resulting from omitted variables. In the empirical application, it allows identifying different significant interaction effects.

Keywords: Agricultural and Food Policy; Land Economics/Use; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 37
Date: 2016-05-24
New Economics Papers: this item is included in nep-cse
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:235576

DOI: 10.22004/ag.econ.235576

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