2004 | OriginalPaper | Buchkapitel
Probit in a Spatial Context: A Monte Carlo Analysis
verfasst von : Kurt J. Beron, Wim P. M. Vijverberg
Erschienen in: Advances in Spatial Econometrics
Verlag: Springer Berlin Heidelberg
Enthalten in: Professional Book Archive
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Data are often observed in a binary form: vote for or vote against; buy or don’t buy; build or don’t build; move or don’t move, etc. In classical econometrics this situation has been extensively studied and appropriate procedures developed to handle the nature of the data. The standard model however does not allow for spatial processes to drive the choices made by decision makers. For example, whether one city increases its sales tax may depend the actions of neighboring cities. Whether one jurisdiction subsidizes the construction of a new sports arena depends on the options that are offered to the sports enterprise by other jurisdictions — which has been occurring with increasing frequency in the United States, at the threat of the team moving elsewhere. In both of these cases, the conventional probit model fails to account for interdependencies.