On the specification of spatial econometric models

In this paper we discuss the specification process of a spatial econometric model. There are a lot of results available in a time series context, which form a very well structured phase, but little has been said when the domain of the model is the Space in relation to this question. There are several points that merit some special attention. For example, it is not clear if the concepts of integration and cointegration are also relevant in a spatial context. Moreover, at this moment we do not have any specific criteria in order to solve the selection of the variables. This weakness lead us to another question, which is related to the correlation problem: Which kind of cross-sectional dynamics could be allowed in a spatial specification? At present, in case of finding spatial autocorrelation in a model we try to model it immediatly, without considerer that if it may reflect a previous specification error. Finally, there is the problem of the outliers which are of paramount importance in time series but just unkown in a spatial context. We will discuss each one of this topics making reference to a general specification and looking also at the final stage of model selection.

GEOGRAPHICAL LABOUR MOBILITY IN SPAIN - A PANEL DATA APPROACH

In this paper, we study geographical labour mobility taken by workers in Spain from a regional standpoint. Using a panel data set referred to the evolution of these decisions in the 1990-2003 period, the main objective is to determine what are the main variables that influence in labour mobility as well as to quantify their impact. To this respect, regional labour market status, spatial variations in employment opportunities and house prices have turned to be the main determinants. Furthermore, also certain socio-demographic characteristic of workers such as education, marital status and the presence of children in the household are also of great relevant.

Local weighting or the necessity of flexibility

The local estimation algorithms are well-known techniques in the current spatial econometric literature. The Geographically Weighted Regressions are very popular to estimate, locally, static models, whereas the SALE or the Zoom approaches are useful solutions in the case of dynamic models. These techniques are well founded from a methodological point of view and present interesting properties. However, Farber and Paez (2008) detect some inconsistencies in the behavior of some of these algorithms that claim for a further analysis. The point that we want to study in this paper refers to the role of the bandwith. This measure defines how many neighbors will be used in the estimation of the local parameters corresponding to each observation. The cross-validation is the most popular criteria to fix the bandwith, although there are several other criteria in the literature. We think that there is a basic problem with this approach. The objective of these algorithms is to relax the restriction of homogeneity of the parameters of the model allowing for local peculiarities; however the definition of local neighborhood is the same. It does not matter if the observation corresponds to an isolated and poorly communicated region or it belongs to a central and highly connected point. According to our view, this is a very restrictive decision that should be avoided. Specifically, we discuss the procedure of specifying the sequence of local weighting matrices that will be used in the analysis. Our purpose is to achieve that these matrices also reflect the local surrounding of each observation. We examine two different strategies in order to construct the local weighting matrices. The first is a parametric approach which involves the J test, as presented by Kelejian (2008), and the second is a nonparametric approach that uses the guidance of the symbolic entropy measures. The first part of the paper presents the overall problem, including a review of the literature; we discuss the solutions in the second part and the third part consists of a Monte Carlo simulation.

Vuong and Wald tests. Simplicity vs. Complexity

The specification of cross-sectional models is usually solved following a traditional procedure, highly supported by practitioners. In the first step, a simple model is proposed that will be subsequently improved with different elements if the evidence so advises. This procedure expedites the econometric solution and fits well into the Lagrange Multiplier approach, which contributes to explain its current popularity. However, there are other methods that could also be used, and some of them are considered in this paper. Specifically, we turn our attention to the Vuong test, developed in the context of the Kullback-Leibler information measure. This test represents an intermediate solution between the complexity inherent in the Wald test and the simplicity of the Lagrange Multiplier principle.

Outliers in Cross-Sectional Regression

The robustness of the results coming from an econometric application depends to a great extent on the quality of the sampling information. This statement is a general rule that becomes especially relevant in a spatial context where data usually have lots of irregularities. The purpose of our paper is to examine more closely this question paying attention to one point in particular, namely outliers. The presence of outliers in the sample may be useful, for example in order to break some multicollinearity relations but they may also result in other inconsistencies. The main aspect of our work is that we resolve the discussion in a spatial context, looking closely into the behaviour shown, under several unfavourable conditions, by the most outstanding misspecification tests. For this purpose, we plan and solve a Monte Carlo simulation. The conclusions point to the fact that these statistics react in a different way to the problems posed.

Selecting the W Matrix. Parametric vs Nonparametric Approaches

In spatial econometrics, it is customary to specify a weighting matrix, the so-called W matrix, just choosing one matrix from the different types of matrices a user is considering (Anselin, 2002). In general, this selection is made a priori, depending on the user’s judgment. This decision is extremely important because if matrix W is miss-specified in some way, parameter estimates are likely to be biased and they will be inconsistent in models that contain some spatial lag. Also, for models without spatial lags but where the random terms are spatially autocorrelated, the obtaining of robust standard estimates of the errors will be incorrect if W is miss-specified. Goodness-of-fit tests may be used to chose between alternative specifications of W. Although, in practice, most users impose a certain W matrix without testing for the restrictions that the selected spatial operator implies. In this paper, we aim to establish a nonparametric procedure where the chosen by objective criteria. Our proposal is directly related with the Theory of Information. Specifically, the selection criterion that we propose is based on objective information existing in the data, which does not depend on the investigator’s subjectivity: it is a measure of conditional entropy. We compare the performance of our criteria against some other alternative like the J test of Davidson and McKinnon or a likelihood ratio obtained in a maximum likelihood framework.

Spanish Demand for Food Away From Home: A Panel Data Approach

In this paper, the Spanish demand for food away from home is analysed. A panel data set is built and appropriate techniques for estimating limited dependent variable models have been applied. Results indicate that where there are zero expenditures, these are largely due to infrequency of purchase rather than to abstention or to economic reasons. Furthermore, important differences appear among households. On the one hand, those households whose head is a highly-educated person, male, young and living on a salary in a large town are more likely to purchase food away from home. On the other hand, increases in income only provokes more than proportional increases in expenditure for those households headed by an unschooled person, a female or a person older than 55 and also for those households with more than half of its members older than 60 years.Demand for food away from home, household production theory, panel data., Consumer/Household Economics, C23, C24, D12,

Looking for performance: how innovation and straregy may affect market orientation models

Despite 20 years of research into various aspects of the ‘Market Orientation’ (MO) construct, dubiety persists regarding the existence, nature and significancy of the relationship between market orientation and firm performance. In order to get more evidence some authors suggest including innovation in MO models. Debate also continues to examine whether organizational strategy is an antecedent or a consequence of MO, whilst some argue that strategy moderates the MO-performance relationship. Furthermore, there are sectors of industry and geographies where the phenomenon has received very little investigation, even of an exploratory nature. This study aims to explore the MO-performance relationship and to value the effect of innovation in MO-performance models in a sector where MO was virtually unknown: the Spanish real estate industry. The magnitude of the shifts taking place in this sector enhances its potential as a showcase for processes of anticipation and adaptation to the environment. In addition, the paper aims to shed some light on the question of whether strategy potentially moderates the MO-performance link. Finally, the principal implications of our findings are discussed.Market orientation, innovation, performance, strategy, real estate sector

Ultracold polar molecules as qudits

We discuss how the internal structure of ultracold molecules, trapped in the motional ground state of optical tweezers, can be used to implement qudits. We explore the rotational, fine and hyperfine structure of $^{40}$Ca$^{19}$F and $^{87}$Rb$^{133}$Cs, which are examples of molecules with $^2\Sigma$ and $^1\Sigma$ electronic ground states, respectively. In each case we identify a subset of levels within a single rotational manifold suitable to implement a 4-level qudit. Quantum gates can be implemented using two-photon microwave transitions via levels in a neighboring rotational manifold. We discuss limitations to the usefulness of molecular qudits, arising from off-resonant excitation and decoherence. As an example, we present a protocol for using a molecular qudit of dimension $d=4$ to perform the Deutsch algorithm