Spatial autoregression
The spatial autoregression model considers the dependence of the value upon near regions and integrates that dependence into the data-generation process. We'll be working with a Simultaneous Autoregressive (SAR) model here. One important parameter here is lambda, which indicates the level of spatial dependence, where a positive value indicates positive correlation, a negative value indicates negative correlation, and zero means no spatial dependence.
First, we fit a SAR model without a predictor (that is, as an intercept-only model) using the spautolm() function of the spdep package. The first argument to spautolm() specifies the model and the second argument specifies the listw object, containing neighbors and weights. ...
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