Abhimanyu Gupta, Jungyoon Lee, Francesca Rossi
arXiv 19 Dec 2024 · Econometrics
arXiv:2412.14778 · PDF · DOI · OpenAlex · Extracted main text
We propose a computationally straightforward test for the linearity of a spatial interaction function. Such functions arise commonly, either as practitioner imposed specifications or due to optimizing behaviour by agents. Our conditional heteroskedasticity robust test is nonparametric, but based on the Lagrange Multiplier principle and reminiscent of the Ramsey RESET approach. This entails estimation only under the null hypothesis, which yields an easy to estimate linear spatial autoregressive model. Monte Carlo simulations show excellent size control and power. An empirical study with Finnish data illustrates the test's practical usefulness, shedding light on debates on the presence of tax competition among neighbouring municipalities.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Lyytikäinen, T (2012) Tax competition among local governments: Evidence from a property tax reform in Finland | 0.874 | 12 | 2 | 100% |
| 2 | Hong, Y. and H. White (1995) Consistent specification testing via nonparametric series regression | 0.737 | 3 | 2 | 100% |
| 3 | König, M. D., D. Rohner, M. Thoenig, and F. Zilibotti (2017) Networks in conflict: Theory and evidence from the Great War of Africa | 0.737 | 3 | 2 | 100% |
| 4 | de Jong, R. M. and H. J. Bierens (1994) On the limit behavior of a Chi-square type test if the number of conditional moments tested approaches infinity | 0.644 | 2 | 2 | 100% |
| 5 | Gupta, A. and M. H. Seo (2023) Robust inference on infinite and growing dimensional time-series regression self | 0.644 | 2 | 2 | 100% |
| 6 | Jenish, N. and I. R. Prucha (2012) On spatial processes and asymptotic inference under near-epoch dependence | 0.644 | 2 | 2 | 100% |
| 7 | Tullock, G (1980) Efficient rent seeking | 0.644 | 2 | 2 | 100% |
| 8 | Ballester, C., A. Calvó-Armengol, and Y. Zenou (2006) Who's who in networks. Wanted: The key player | 0.644 | 2 | 2 | 100% |
| 9 | Bramoullé, Y. and R. Kranton (2007) Public goods in networks | 0.644 | 2 | 2 | 100% |
| 10 | Calvó-Armengol, A., E. Patacchini, and Y. Zenou (2009) Peer effects and social networks in education | 0.644 | 2 | 2 | 100% |
Showing the top 10 of 45 scored citations.