A Short Exercise to Assess the Effects of Temporal and Spatial Aggregation on the Amounts of Spatial Spillovers

In the modifiable areal unit problem (MAUP) literature, it is known that in measuring spillover effects, the magnitudes of spillovers are different depending on the scale of the temporal/spatial units. However, the research has not addressed whether the magnitude of the spillover increases or decreases as the unit of measurement increases. From an exercise using a constructed regional economic system, it is shown that depending on how researchers make assumptions about the data generating process of regional economies, the magnitude of the measured spillover may be smaller or larger as the unit of measurement increases. It is also argued that with a reasonable assumption that there is a common factor affecting the data generating processes of regional units (i.e., the regional economic system is characterized by a multi-level structure), the larger the unit of scale, the smaller the amount of spillover.