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A spatial latent class model
- Lee, Jiyon
- Economics letters 2018 v.162 pp. 62-68
- Monte Carlo method, algorithms, dynamic models, economics
- This paper applies the latent class approach to underlying spatial dynamic models. Spatial weights are assumed to be time-varying, although the class membership of each unit is fixed over time. The class-specific parameters and class memberships are estimated with EM algorithm. The performance of the proposed model with a finite sample is examined using Monte Carlo simulation.