Dear R users,

I'm estimating  a spatial error model for panel data by maximum likelihood (library splm, function spml). I'm using R version 2.13.1 (2011-07-08) platform: x86_64-pc-mingw32/x64 (64-bit). The operational system is Windows 7 64-bit and my computer has 4Gb of RAM.

My panel data has two periods,5000 regions and 20 explanatory variables. When I try to estimate a random effects model in my computer, it spends hours and does not get to any result. The code I'm using is

semre30307<- spml(formula=full, data=panel0307, index=c("GEOCODIG_M","ano"), listw=nlist0307, model ="random",  effect =c("individual"),  lag=FALSE, method="Matrix", spatial.error="b")

I already tried to change de "method", but it doesn't get any better, which is awkward since using options MAtrix, Monte Carlo, or Chebyshev should increase the speed of  calculation of the Jacobian  term comparing to eigen option. Also, I'm not having any trouble estimating the spatial lag version of this model!

I guess my doubts are: is this normal? Am I doing something wrong or forgetting something? What are the computer minimum requirements to estimate such model?

Thanks in advance.

Rafael Terra

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