Reflections on spatial autocorrelation

The concept, spatial autocorrelation, is central to many concerns expressed in Regional Science and Urban Economics. The term, first used in 1967, had precursors embodied in such ideas as distance-decay and spatial interaction. Today, spatial autocorrelation is the mainstay of the burgeoning field of spatial econometrics. Its study has many advantages such as providing tests on model misspecification. The Moran's I statistic is one of many ways spatial autocorrelation can be represented. Interestingly, the concept has yet to make a significant appearance in the mainstream econometrics literature.