A suggested method of estimation for spatial interdependent models with autocorrelated errors, and an application to a county expenditure model

The purpose of this paper is two-fold. First, we describe an estimation procedure that should be useful for spatial models which contain interactions between the dependent variables and autocorrelated error terms. Second, we apply that procedure to a spatial model relating to county police expenditures. Our estimation procedure does not require the specification of the error distribution, and its computational burden is modest. Large sample results are given.