Local influence analysis in general spatial models

Abstract

We study the local influence in the general spatial model which includes the spatial autoregressive model and the spatial error model as two special cases. The stepwise local influence procedure is employed in our diagnostic analysis. We derive the local diagnostic measures in the general spatial model under three perturbation schemes, namely, the variance perturbation, dependent variable perturbation and explanatory variable perturbation schemes. A simulation example and two real-data examples are analysed in detail and they show that the stepwise local influence analysis is effective in identifying influential observations and is a powerful tool for uncovering masking effects.