Measurement errors in a spatial context

J. Le Gallo, B. Fingleton

Research output: Contribution to journalConference Contribution

5 Citations (Scopus)

Abstract

Measurement error in an independent variable is one reason why OLS estimates may not be consistent. However, as shown by Dagenais (1994), in some circumstances the OLS bias may be ameliorated somewhat given the presence of serially correlated disturbances, and OLS may prove superior to standard techniques used to correct for serial correlation. This paper considers the case of cross-sectional regression models with measurement errors in the explanatory variables and with spatial dependence. The study focuses on the evidence provided by an empirical illustration and Monte Carlo experiments examining measurement error impact in the presence of autoregressive error processes and autoregressive spatial lags.
Original languageEnglish
Pages (from-to)114-125
Number of pages12
JournalRegional Science and Urban Economics
Volume42
Issue number1-2
DOIs
Publication statusPublished - 2012

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Keywords

  • autoregressive model
  • Monte-Carlo simulations
  • measurement error
  • spatial autocorrelation
  • matrices
  • instrumental variables

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