Testing and Correcting for Spatial Unit Roots in Regression Analysis

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• Accepted version (preprint)
• Old working paper
• Stata package

Abstract

Spatial unit roots can lead to spurious regression results. We present an overview of the methods developed in Müller and Watson (2024) to test and correct for spatial unit roots, and introduce a suite of Stata commands (spur) implementing these techniques. Our commands exactly replicate results in Müller and Watson (2024) using the same Chetty (2014) data. As a guide for applied researchers, we provide a practical algorithm for regression analysis using these methods, alongside a simulated illustration in Stata.

Citation

Becker, Sascha O., P. David Boll and Hans-Joachim Voth “Spatial Unit Roots in Regressions: A Practitioner’s Guide and a Stata Package”, The Warwick Economics Research Paper Series (TWERPS) 1541 (2025), University of Warwick, Department of Economics.

@TechReport{becker2025,
  author={Becker, Sascha O. and Boll, P. David and Voth, Hans-Joachim},
  title={Spatial Unit Roots in Regressions: A Practitioner's Guide and a Stata Package},
  year=2025,
  institution={University of Warwick, Department of Economics},
  type={The Warwick Economics Research Paper Series (TWERPS)},
  url={https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2025/twerp_1541-_becker.pdf},
  number={1541},
}