Spatial and Network Interdependence, Panel Data, Higher-Order Network Effects
Working Papers Series
Economic Policy | Economics | Public Affairs, Public Policy and Public Administration
Many data situations require the consideration of network effects among the cross-sectional units of observation. In this paper, we present a generalized panel model which accounts for two features: (i) three types of network effects on the right-hand side of the model, namely through weighted dependent variable, weighted exogenous variables, as well as weighted error components, and (ii) higher-order network effects due to ex-ante unknown network-decay functions or the presence of multiplex (or multi-layer) networks among all of those. We outline the model, the basic assumptions, and present simulation results.
Baltagi, Badi; Ding, Sophia; and Egger, Peter, "A Panel Data Model with Generalized Higher-Order Network Effects" (2020). Center for Policy Research. 265.
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