Working paper

Efficient Estimation of Spatial Econometric Interaction Models for Sparse OD Matrices

Lukas Dargel, and Christine Thomas-Agnan

Abstract

In the framework of spatial econometric interaction models for origin-destination flows, we develop an estimation method for the case when the list of origins may be distinct from the list of destinations, and when the origin-destination matrix may be sparse. The proposed model resembles a weighted version of the one of LeSage (2008) and we are able to retain most of the efficiency gains associated with the matrix form estimation, which we illustrate for the maximum likelihood estimator. We also derive computationally feasible tests for the coherence of the estimation results and present an efficient approximation of the conditional expectation of the flows, marginal effects and predictions.

Keywords

Spatial Econometric; Interaction Models; Zero Flow Problem; OD Matrices; Networks;

JEL codes

  • C21: Cross-Sectional Models • Spatial Models • Treatment Effect Models • Quantile Regressions
  • C51: Model Construction and Estimation

Reference

Lukas Dargel, and Christine Thomas-Agnan, Efficient Estimation of Spatial Econometric Interaction Models for Sparse OD Matrices, TSE Working Paper, n. 23-1409, February 2023.

Published in

TSE Working Paper, n. 23-1409, February 2023