Hi everyone,

I am running a spatial autoregressive model (SAR) with stata commands spregress and spmatrix (for my W). I am lagging only the dependent variable. For both row and minmax normalization, I am getting a rho coefficient outside of the acceptable range (12.9); with spectral normalization, rho is “normal” (within -1 to 1). Can someone please explain this to me? I don’t want to just use spectral normalization because it “looks right”.

Thanks a bunch!