[R-sig-Geo] LR1.sarlm specifications

[Roger Bivand]

On Thu, 11 Jul 2019, Amitha Puranik wrote:

> Hi Prof. Roger,
>
> I am using the approach proposed by Prof Paul Erhorst for choosing a 
> spatial model in his paper '*Applied spatial econometrics: raising the 
> bar*' . As per the strategy, one has to check the likelihood ratio test 
> for theta (spatial autocorrelation in exogenous (independent) variables) 
> and also in theta+rho*beta (spatial autocorrelation in residuals). 
> Suppose I fit a spatial durbin model and use the code LR1.sarlm(sp.dm), 
> how would I know whether the likelihood ratio test checks for 
> autocorrelation in dependent variable or autocorrelation in the 
> independent variable?

The spatialreg::LR1.sarlm() test simply between the fitted model and the 
same model assuming the spatial coefficients are zero, so it only tests 
the possible benefit of including (a) spatial process(es). 
spatialreg::LR.sarlm() lets you test between nested models, and works like 
lmtest::lrtest(). The models need to be nested, so you can test SDM/SLM, 
SDM/SEM (equivalent to a Common Factor test), and so on, but only if the 
models nest (not SEM/SLM, because they do not nest).

Hope this helps,

Roger

>
> Thanks in advance.
> Amitha Puranik.
>
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>
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-- 
Roger Bivand
Department of Economics, Norwegian School of Economics,
Helleveien 30, N-5045 Bergen, Norway.
voice: +47 55 95 93 55; e-mail: Roger.Bivand using nhh.no
https://orcid.org/0000-0003-2392-6140
https://scholar.google.no/citations?user=AWeghB0AAAAJ&hl=en