Title: Spatial models with smooth transitions
Authors: Ingrid Mattsson - Uppsala university (Sweden) [presenting]
Johan Lyhagen - Uppsala University (Sweden)
Abstract: The aim is to investigate spatial autoregressive models and the possibility that spatial effects differ between different locations. To account for this we propose a model where a logistic function is used to capture the non-linearity in the spatial lag parameter. This creates a spatial lag model with smooth transitions, where the effect of the spatial neighbors depends on the transition variable in the logistic function. An LM test for detecting non-linearity is derived and a simulation study, where the properties of the test are investigated, is conducted. The simulations reveal that the test shows good power even in relatively small samples with moderate deviation from linearity. We further include an empirical application where data from the 2014 Swedish general election is used to explore the spatial dependence between voting districts.