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The Strathprints institutional repository is a digital archive of University of Strathclyde research outputs.

Strathprints serves world leading Open Access research by the University of Strathclyde, including research by the Strathclyde Institute of Pharmacy and Biomedical Sciences (SIPBS), where research centres such as the Industrial Biotechnology Innovation Centre (IBioIC), the Cancer Research UK Formulation Unit, SeaBioTech and the Centre for Biophotonics are based.

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Measurement errors in a spatial context

Le Gallo, J. and Fingleton, B. (2012) Measurement errors in a spatial context. Regional Science and Urban Economics, 42 (1-2). pp. 114-125. ISSN 0166-0462

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Abstract

Measurement error in an independent variable is one reason why OLS estimates may not be consistent. However, as shown by Dagenais (1994), in some circumstances the OLS bias may be ameliorated somewhat given the presence of serially correlated disturbances, and OLS may prove superior to standard techniques used to correct for serial correlation. This paper considers the case of cross-sectional regression models with measurement errors in the explanatory variables and with spatial dependence. The study focuses on the evidence provided by an empirical illustration and Monte Carlo experiments examining measurement error impact in the presence of autoregressive error processes and autoregressive spatial lags.