Center for Policy Research
Working Paper
Two Special Spatial Weight Matrices and Their Effects on Estimation and Testing in Spatial Regressions
Badi H. Baltagi and Long Liu
C.P.R. Working Paper No. 287
March 2026
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.