Summarizing large spatial datasets: Spatial principal components and spatial canonical correlation

Samyukta Bhupatiraju, Bart Verspagen & Thomas Ziesemer

#2013-011

We propose a method for spatial principal components analysis that has two important advantages over the method that Wartenberg (1985) proposed. The first advantage is that, contrary to Wartenberg's method, our method has a clear and exact interpretation: it produces a summary measure (component) that itself has maximum spatial correlation. Second, an easy and intuitive link can be made to canonical correlation analysis. Our spatial canonical correlation analysis produces summary measures of two datasets (e.g., each measuring a different phenomenon), and these summary measures maximize the spatial correlation between themselves. This provides an alternative weighting scheme as compared to spatial principal components analysis. We provide example applications of the methods and show that our variant of spatial canonical correlation analysis may produce rather different results than spatial principal components analysis using Wartenberg's method. We also illustrate how spatial canonical correlation analysis may produce different results than spatial principal components analysis.

Keywords: spatial principal components analysis; spatial canonical correlation analysis; spatial econometrics; Moran coefficients; spatial concentration

JEL Classification: R10, R15, C10

  


UNU-MERIT