A Suggested Method of Estimation for Spatial Interdependent Models with Autocorrelated Errors, and an Application to a County Expenditure Model

Harry H. Kelejian and Dennis P. Robinson , Papers in Regional Science 72(3) , 297-312 , July 1993.

The purpose of this paper is two-fold. First, we describe an estimation procedure that should be useful for spatial models which contain interactions between the dependent variables and autocorrelated error terms. Second, we apply that procedure to a spatial model relating to county police expenditures. Our estimation procedure does not require the specification of the error distribution, and its computational burden is modest. Large sample results are given.

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