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Preprints, Working Papers, ... Year : 2024

The empirical content of spatial spillovers: Identification issues

Abstract

The notion of spatial spillovers has been widely used in applied spatial econometrics. In this paper, we consider their empirical content under the lens of identification in both structural and causal reduced-form models. Discussing the various threats to identification in structural models, we point out that the typical estimation framework proposed in the applied spatial econometric literature boils down to considering spillovers as a side-effect of a data-driven chosen specification, which strongly hampers their empirical content. We also discuss the limits of using interaction matrices purely based on geography to identify the source and content of spillovers. Then, we present reduced forms impact evaluation models for spatial data and show that the current spatial versions of usual impact evaluation models are not fully satisfactory when considering the identification issue. Finally, a set of recommendations for applied papers aimed at identifying spatial spillovers is proposed.
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hal-04549691 , version 1 (17-04-2024)

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Nicolas Debarsy, Julie Le Gallo. The empirical content of spatial spillovers: Identification issues. 2024. ⟨hal-04549691⟩
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