Incorporating Transportation Network Structure in Spatial Econometric Models of Commodity Flows

Lesage, James P. and Polasek, Wolfgang (May 2006) Incorporating Transportation Network Structure in Spatial Econometric Models of Commodity Flows. IHS Economics Series 188

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Abstract or Table of Contents

Abstract: We introduce a regression-based gravity model for commodity flows between 35 regions in Austria. We incorporate information regarding the highway network into the spatial connectivity structure of the spatial autoregressive econometric model . We find that our approach produces improved model fit and higher likelihood values. The model accounts for spatial dependence in the origin-destination flows by introducing a spatial connectivity matrix that allows for three types of spatial dependence in the origins to destinations flows. We modify this origin-destination connectivity structure that was introduced by LeSage and Pace (2005) to include information regarding the presence or absence of a major highway/train corridor that passesthrough the regions. Empirical estimates indicate that the strongest spatial autoregressive effects arise when both origin and destination regions have neighboring regions located on the highway network. Our approach provides a formal spatial econometric methodology that can easily incorporate network connectivity information in spatial autoregressive models.;

Item Type: IHS Series
Keywords: 'Commodity flows' 'Spatial autoregression' 'Bayesian' 'Maximum likelihood' 'Spatial connectivity of origin-destination flows'
Classification Codes (e.g. JEL): R1, R41, L92, C21
Status: Published
Date Deposited: 26 Sep 2014 10:38
Last Modified: 22 Jul 2017 09:10
URI: http://irihs.ihs.ac.at/id/eprint/1701

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