Date: 18 MAY 2018 at 14:30
Event location: Aula Seminari, 1st floor, Department of Statistical Science, Via Belle Arti 41, Bologna
Type: Statistics Seminars
Prof. Marcos Herrera, University of Salta, Argentina (e-mail: mherreragomez@gmail.com)
Prof. Jesús Mur†, University of Zaragoza, Spain (e-mail: jmur@unizar.es)
Prof. Manuel Ruiz, Technical University of Cartagena, Spain (e-mail: manuel.ruiz@upct.es)
The practice of spatial econometrics revolves around a weighting matrix, which is often supplied
by the user on previous knowledge. This is the so called W issue. Probably, the aprioristic approach
is not the best solution although, nowadays, there few alternatives for the user. Our contribution
focuses on the problem of selecting aWmatrix from among a finite set of matrices, all of them deemed
appropriate for the case. We develop a new and simple method based on the Entropy corresponding
to the distribution of probability estimated for the data. Other alternatives, which are common in
current applied work, are also reviewed. The paper includes a large Monte Carlo resolved in order to
calibrate the effectiveness of our approach compared to the others. Two well-known case study are
also included.
JEL Classification: C4, C5, R1.
Keywords: Weights matrix, Model Selection, Entropy, Monte Carlo.