the analysis of commodity flows in Sa-En-Nanshin region (Japan) with heteroskedastic spoatial interaction models

This paper aims to investigate interregional commodity flows linked to the current transportation network of the San-En-Nanshin region in Japan. Since spatial units may differ in important characteristics such as their size, homoscedasticity is a very strong assumption and may not hold in empirical cases. For this reason an heteroskedastic version of the conventional spatial interaction models is considered in order to test the presence of network dependence among commodity origin-destination flows. The empirical results show how network dependence affects modeling interregional flows and can be successfully captured with models of the SARAR class estimated with the generalized spatial two stage least squares (GS2SLS) procedure. We also show that the indirect impacts of explanatory variables are dominant with respect to the direct impacts in terms of their magnitude thus reflecting the presence of strong spatial dependence and spillovers effects. In addition, the highly significant total impact of travel distance in time on commodity flow emphasizes the paramount role of transportation connectivity in interregional freight shipment.