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Journal Article

Spatial autocorrelation or model misspecification? The help from RESET and the curse of small samples

Letters in Spatial and Resource Sciences, 2(1): 53–59

Authors

  • Vaona
  • A.

Publication Date

DOI

10.1007/s12076-009-0022-z

JEL Classification

R12 C12 C15 R15 C21

Key Words

Model misspecification

Monte Carlo simulations

RESET

Spatial autocorrelation

In regression analysis,model misspecification can produce spurious spatial correlation in the residuals. By means of Monte Carlo simulations, I show that the RESET test can help to disentangle this conundrum in large samples. Small samples can pose a serious challenge to finding the correct model.

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