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Bayesian inference for dynamic spatial quantile models with interactive effects

Tomohiro Ando, Jushan Bai, Kunpeng Li, Yong Song

arXiv 2 Mar 2025 · Econometrics

arXiv:2503.00772 · PDF · DOI · OpenAlex · Extracted main text

Abstract

With the rapid advancement of information technology and data collection systems, large-scale spatial panel data presents new methodological and computational challenges. This paper introduces a dynamic spatial panel quantile model that incorporates unobserved heterogeneity. The proposed model captures the dynamic structure of panel data, high-dimensional cross-sectional dependence, and allows for heterogeneous regression coefficients. To estimate the model, we propose a novel Bayesian Markov Chain Monte Carlo (MCMC) algorithm. Contributions to Bayesian computation include the development of quantile randomization, a new Gibbs sampler for structural parameters, and stabilization of the tail behavior of the inverse Gaussian random generator. We establish Bayesian consistency for the proposed estimation method as both the time and cross-sectional dimensions of the panel approach infinity. Monte Carlo simulations demonstrate the effectiveness of the method. Finally, we illustrate the applicability of the approach through a case study on the quantile co-movement structure of the gasoline market.

Citation extraction

40
references
49
in-text mentions
40
distinct cited
8
self-citations
10,826
main-text words

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Most heavily cited references

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.

ReferenceIntensityMentionsSectionsMain text
1Ando, T. and J. Bai (2020) Quantile co-movement in financial markets: A panel quantile model with unobserved heterogeneity self0.87462100%
2Chen, L., J. Gonzalo, and J. Dolado (2021) Quantile factor models0.73732100%
3Yu, J., R. de Jong, and L. Lee (2008) Quasi-maximum likelihood estimators for spatial dynamic panel data with fixed effects when both $n$ and $t$ are large0.73732100%
4Beenstock, M. and D. Felsenstein (2015) Estimating spatial spillover in housing construction with nonstationary panel data0.40511100%
5Ghosal, S., J. K. Ghosh, and R. V. Ramamoorthi (1999) Posterior consistency of dirichlet mixtures in density estimation0.40511100%
6Glaser, S., R. Jung, and K. Schweikert (2022) Spatial panel count data: modeling and forecasting of urban crimes0.40511100%
7Koenker, R. and G. Bassett (1978) Regression quantiles0.40511100%
8Ando, T. and J. Bai (2017) Clustering huge number of financial time series: A panel data approach with high-dimensional predictors and factor structures self0.40511100%
9Anselin, L (1988) Spatial econometrics: methods and models0.40511100%
10Aquaro, M., N. Bailey, and M. H. Pesaran (2021) Estimation and inference for spatial models with heterogeneous coefficients: an application to us house prices0.40511100%

Showing the top 10 of 40 scored citations.