ABSTRACT
Two applications of spatial econometric modelling are presented and discussed. The first application aims to evaluate evidence of spatial spillover effects in voting outcomes aggregated to the local authority district level. The second application tests for price competition effects between individual petrol retail outlets in a large city. In both examples, interest focuses on estimating interaction effects between places, thus lending themselves to the spatial econometric approach in which models are expressed as a series of N simultaneous equations, one equation for each spatial unit. Both applications give rise to the problem of endogeneity. In both applications, the outcome variable is assumed to be normally distributed. However, the outcome data in both applications show features that may not satisfy the normality assumption and alternative approaches are discussed. For each application, the background to the problem is described, then the data followed by modelling issues and an exploratory analysis of the data. The results from the modelling are followed by a summary of some of the key statistical findings.
