SELECTION BIAS IN SPATIAL ECONOMETRIC MODELS |
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Authors: | Daniel P McMillen |
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Institution: | Department of Economics, Tulane University, New Orleans, Louisiana 70118 |
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Abstract: | ABSTRACT. The problem of spatial autocorrelation has been ignored in selection-bias models estimated with spatial data. Spatial autocorrelation is a serious problem in these models because the heteroskedasticity with which it commonly is associated causes inconsistent parameter estimates in models with discrete dependent variables. This paper proposes estimators for commonly-employed spatial models with selection bias. A maximum-likelihood estimator is applied to data on land use and values in 1920s Chicago. Evidence of significant heteroskedasticity and selection bias is found. |
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