Method and Application of Spatial Probit Model to the Business Return to New Orleans after Hurricane Katrina
Date
2010-05
Authors
Liu, Xingjian
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Abstract
This study employs a theoretical framework from micro-scale retail location studies
and implements a spatial autoregressive probit model to account for spatial
dependence among firms' decisions and thus identify determinants of business return
to New Orleans after Hurricane Katrina. The spatial probit approach allows for
interdependence between decisions to reopen by one establishment and those of its
neighbors. There is a large literature on the role played by spatial dependence in firm
location decisions, and we find evidence of strong dependence in firm's decisions to
reopen in the aftermath of a natural disaster such as Katrina. This interdependence has important statistical implications for how we analyze business recovery after disasters,
as well as government aid programs. In order to determine the right model
specification, a Monte Carlo experiment is conducted to extends information criteria
for selecting alternative model specifications in spatial econometric modeling, and
provides some insight about performance of different ~odel selection tools for
choosing a spatial weight matrix.
Description
Keywords
Spatial analysis, Economic developments, Hurricane Katrina, Louisiana, New Orleans, Statistics
Citation
Liu, X. (2010). <i>Method and application of spatial probit model to the business return to New Orleans after Hurricane Katrina</i> (Unpublished thesis). Texas State University-San Marcos, San Marcos, Texas.