Sen, Monalisa; Bera, Anil K.; Kao, Yu-Hsien - In: Essays in honor of Jerry Hausman, (pp. 547-559). 2012
In this chapter we investigate the finite sample properties of a Hausman test for the spatial error model (SEM) proposed by Pace and LeSage (2008). In particular, we demonstrate that the power of their test could be very low against a natural alternative like the spatial autoregressive (SAR) model.
