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Empirical Economics

, Volume 47, Issue 4, pp 1543–1562 | Cite as

Forecasting spatially dependent origin and destination commodity flows

  • James P. LeSageEmail author
  • Carlos Llano-Verduras
Article

Abstract

We explore origin–destination forecasting of commodity flows between 15 Spanish regions, using data covering the period from 1995 to 2004. The 1-year-ahead forecasts are based on a recently introduced spatial autoregressive variant of the traditional gravity model. Gravity (or spatial interaction models) attempt to explain variation in \(N = n^2\) flows between \(n\) origin and destination regions that reflect a vector arising from an \(n\) by \(n\) flow matrix. The spatial autoregressive variant of the gravity model used here takes into account spatial dependence between flows from regions neighboring both the origin and destinations during estimation and forecasting. One-year-ahead forecast accuracy of non-spatial and spatial models are compared.

Keywords

Gravity models Bayesian spatial autoregressive regression model Spatial connectivity of origin–destination flows 

JEL Classification

C11 C23 O47 O52 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.Department of Finance & EconomicsTexas State UniversitySan MarcosUSA
  2. 2.Departamento de Análisis Económico: Teoría Económica e Historia EconómicaUniversidad Autónoma de Madrid MadridSpain

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