TESTING THE SPATIAL SCALE AND THE DYNAMIC STRUCTURE IN REGIONAL MODELS (A CONTRIBUTION TO SPATIAL ECONOMETRIC SPECIFICATION ANALYSIS)*

This article addresses the problem of specification uncertainty in modeling spatial economic theories in stochastic form. It is ascertained that the traditional approach to spatial econometric modeling does not adequately deal with the type and extent of specification uncertainty commonly encountered in spatial economic analyses. Two alternative spatial econometric modeling procedures proposed in the literature are reviewed and shown to be suitable for analyzing systematically two sources of specification uncertainty, viz., the level of aggregation and the spatio-temporal dynamic structure in multiregional econometric models. The usefulness of one of these specification procedures is illustrated by the construction of a simple multiregional model for The Netherlands.     

THE NET FISCAL IMPACT OF SELECTED FEDERAL BLOCK GRANT PROGRAMS*

This paper examines the net fiscal benefits of various federal grants and taxes paid to finance them. Net, effective tax rates are calculated for all county areas in the U.S. for seven measured grant programs, and the distributions of such tax rates are examined in conjunction with the median family incomes of the county areas. Inferences about the progressivity (or regressivity) of the grant programs are made, as well as inferences about the horizontal equity of the grant programs through the use of a new class of index numbers. It was found that more progressive grant formulas, which provide greater rates of subsidy to areas with lower median family incomes, also tend to be less horizontally equitable.