Dear Statalisters,


I want to implement a Spatial Durbin Model with correlated random effects. Is it even possible? If it is, how do I specify it? Is this correct:

Code:
yit = α + ρ1Wyit + ρ2Wybari + β1Xit + β2Xbari + θ1WXit + θ2WXbari + θ3Ci + λt  + μi + Ɛit
I know for the "ordinary" SDM with random effects, this would be:

Code:
xsmle y X, wmat(W) model(sdm) re vce(cluster id) nolog
So if it is possible to implement the SDM with correlated random effects, would it be proper to run the following 'xsmle' command?

Code:
xsmle y X, ybar Xbar wmat(W) dmatrix(W) model(sdm) durbin(ybar X Xbar ) effects re vce(cluster id) nolog
Can someone please help me out on this?

Thank you