Simple diagnostic tests for spatial dependence

Luc Anselin, Anil K. Bera, Raymond Florax, Mann J. Yoon

Research output: Contribution to journalArticlepeer-review

1122 Scopus citations


In this paper we propose simple diagnostic tests, based on ordinary least-squares (OLS) residuals, for spatial error autocorrelation in the presence of a spatially lagged dependent variable and for spatial lag dependence in the presence of spatial error autocorrelation, applying the modified Lagrange multiplier (LM) test developed by Bera and Yoon (Econometric Theory, 1993, 9, 649-658). Our new tests may be viewed as computationally simple and robust alternatives to some existing procedures in spatial econometrics. We provide empirical illustrations to demonstrate the usefulness of the proposed tests. The finite sample size and power performance of the tests are also investigated through a Monte Carlo study. The results indicate that the adjusted LM tests have good finite sample properties. In addition, they prove to be more suitable for the identification of the source of dependence (lag or error) than their unadjusted counterparts.

Original languageEnglish (US)
Pages (from-to)77-104
Number of pages28
JournalRegional Science and Urban Economics
Issue number1
StatePublished - Feb 1996


  • Lagrange multiplier tests
  • Local mis-specification
  • Monte Carlo studies
  • Spatial autocorrelation
  • Specification tests

ASJC Scopus subject areas

  • Economics and Econometrics
  • Urban Studies


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