Bayesian clustered coefficients regression with auxiliary covariates assistant random effects

In regional economics research, a problem of interest is to detect similarities between regions, and estimate their shared coefficients in economics models. In this article, we propose a mixture of finite mixtures clustered regression model with auxiliary covariates that account for similarities in...

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Bibliographic Details
Published inStatistical modelling Vol. 23; no. 3; pp. 273 - 293
Main Authors Hu, Guanyu, Xue, Yishu, Ma, Zhihua
Format Journal Article
LanguageEnglish
Published New Delhi, India SAGE Publications 01.06.2023
Subjects
MCMC
housing cost data
Mixture of finite mixture
spatial clustering
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Summary:In regional economics research, a problem of interest is to detect similarities between regions, and estimate their shared coefficients in economics models. In this article, we propose a mixture of finite mixtures clustered regression model with auxiliary covariates that account for similarities in demographic or economic characteristics over a spatial domain. Our Bayesian construction provides both inference for number of clusters and clustering configurations, and estimation for parameters for each cluster. Empirical performance of the proposed model is illustrated through simulation experiments, and further applied to a study of influential factors for monthly housing cost in Georgia.
ISSN:1471-082X
1477-0342
DOI:10.1177/1471082X211049278