There seems to be an issue with the calculation of marginal effects for spatial models containing a spatially lagged dependent variable (e.g. SAR, SAC, and SDM models). As far as I can tell, there are two ways to calculate marginal effects: (1) including the "effects" option when estimating the model and (2) using the post-estimation command "margins." These should result in the same marginal (total) effect, right? Specifically, the total marginal effect for a given regressor should = (that regressor's estimated coefficient)*[1/(1-rho)] because spatial spillovers produce a geometric series. The use of "margins" gives this result exactly, but the use of "effects" gives a result that is close, but slightly larger. See below for a simple illustration of an SAR model with only one regressor. What is going on here? Why is "effects" not giving the anticipated result? I need to figure this out because, as far as I know, direct and indirect effects can only be obtained using "effects" (not "margins"). Please help. Array
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