2 Closed form estimation of spatial dependence using matrix exponentials
This section sets forth a unique interior optimal spatial transformation of the dependent variable. Section
presents the MESS model based on this spatial transformation, section
discusses the matrix exponential and its computation in a statistical context and section
provides the closed form solution that is based on the eigenvalues of a small matrix. Section
proves that the solution is both interior and unique, while section
illustrates hypothesis testing for the MESS model and section
details the construction of diagnostic statistics.