Item

Spatial correlation in household choices in rural Indonesia

Abstract
Many household choices in developing economies are correlated with choices of nearby households, because nearby locations have unobserved factors in common and households and their neighbors interact. However, models recognizing these spatial correlations are rarely used because few surveys give exact household locations. In the present paper, we use unusual data from rural Indonesia, where distances between households can be measured, to examine spatial effects in equations for non-farm enterprises' share of household incomes and food's share of total household budgets. Our results indicate that ignoring spatial correlations in household choices might cause bias and inferential errors and could distort recommended policy interventions aiming to raise living standards in rural Asia.
Type
Journal Article
Type of thesis
Series
Citation
Gibson, J., Kim, B. & Olivia, S. (2011). Spatial correlation in household choices in rural Indonesia. Asian Economic Journal, 25(3), 271-289.
Date
2011-09
Publisher
Wiley
Degree
Supervisors
Rights
Publisher version