In this paper we consider a simultaneous system of spatially interrelated cross sectional equations. Our speci.cation incorporates spatial lags in the endogenous and exogenous variables. In modelling the disturbance process we allow for both spatial correlation as well as correlation across equations. The data set is taken to be a single cross section of observations. The model may be viewed as an extension of the widely used single equation Cli3-Ord model.
Estimation of Simultaneous Systems of Spatially Interrelated Cross Sectional EquationsHarry H. Kelejian and Ingmar Prucha ,
2( 118 )
Journal of Econometrics