European Regional Science Association
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European Regional Science Association
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The abstract for paper number 42:
Jorgen Lauridsen, Associate Professor, Odense, Denmark, Reinhold Kosfeld, Professor, Kassel, Germany
A Test Strategy for Spurious Spatial Regression, Spatial Nonstationarity, and Spatial Cointegration
A test strategy consisting of a twofold application of a Lagrange Multiplier test is suggested as a device to reveal spatial nonstationarity and spurious spatial regeression. It is further illustrated how the test strategy can be used as a diagnostic for presence of a spatial cointegrating relationship between two variables. Using Monte Carlo simulations it is shown that the small sample behaviour of the test strategy is as desired in these cases.