Template-type: ReDIF-Paper 1.0
Author-Name: Revelli Federico
Author-Email: federico.revelli@unito.it
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: Neighborhood effects in social service provision. Competition or reflection?
Abstract: Expenditures by local goverments often exhibit positive spatial autocorrelation. A spatial pattern might 
arise either from an endogenous effect (with local authorities being affected by the average behavior in the 
neighborhood) or from exogenous/correlated effects(with the behavior of close-by authorities simply reflecting 
common neighborhood characteristics or correlated shocks).In order to identify the underlying spatial process, 
this paper models the determination of local expenditure on social services within a spatial framework that allows 
interdependent local authority behavior and spatially auto-correlated shocks, and performs an empirical analysis 
on a cross-section of UK local goverments. The IV (instrumental variables)and ML (maximum likelihood) estimates of 
a SAR (spatial auto-regressive) model, as well asthe ML estimates of SARMA (spatial auto-regressive moving average) 
model suggest that the most likely source of spatial auto-correlation in social spending is endogenous mimicking 
among neighboring localities.
Length: 27 pages
Creation-Date: 2002-12
File-URL: http://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2002dip/6_wp_revelli.pdf
File-Format: Application/PDF
Handle: RePEc:uto:dipeco:200206