| Badi Baltagi, Texas A & M University Dong Li, East Carolina University |
| LM Tests for Functional Form and Spatial Correlation |
| Session: C-10-19 Tuesday 15 August 2000 by Li, Dong |
| This paper derives Lagrangian Multiplier tests to jointly test for functional form and spatial error correlation. In particular, this paper tests for linear and loglinear models with no spatial error dependence against a more general Box-Cox model with spatial error correlation. Conditional LM tests and modified Rao-Score tests that guard against local misspecification are also derived. These tests are easy to implement and are illustrated using Anselin's (1988) crime data. The performance of these tests are also compared using Monte Carlo experiments. |
| Submitted paper full-text in .pdf |