Two Special Spatial Weight Matrices and Their Effects on Estimation, Testing in Spatial Regressions

Two Special Spatial Weight Matrices and Their Effects on Estimation and Testing in Spatial Regressions

Badi H. Baltagi, Long Liu

Economics Letters, March 2026

Badi H. Baltagi

Economics Department

Center for Policy Research

Research Methods

Economics Letters

Badi H. Baltagi

Abstract

This paper collects in one place some of the consequences of using two special spatial weight matrices in the spatial econometrics literature. The two weight matrices considered are the equal weight spatial matrix and the complete bipartite network. In particular, we summarize the effects of these special weight matrices on the statistical properties of commonly used spatial estimators as well as commonly used tests for spatial dependence.