Spatial Unit Roots in Regressions: A Practitioner’s Guide and a Stata Package

Author: Sascha O. Becker (U Warwick)P. David Boll (U Warwick)Hans-Joachim Voth (U Zurich)
Posted: 11 February 2025

Abstract

Spatial unit roots can lead to spurious regression results. We present a brief overview of the methods developed in Müller and Watson (2024) to test for and correct for spatial unit roots. We also introduce a suite of Stata commands (-spur-) implementing these techniques. Our commands exactly replicate results in Müller and Watson (2024) using the same Chetty et al. (2014) data. We present a brief practitioner’s guide for applied researchers.
JEL codes: 21, C22, C52, C87, N0, P0, R12, R15