[Openspace] problems in tol.solve (spdep)

[Mario Gellrich]

Hi!

I am using Roger Bivands spdep package in R and obtained error messages by 
using the default of 1.0e-7 in tol.solve in spatial lag and error models 
(lagsarlm, errorsarlm). My dataset contains ca. 1,200 columns. I calculated 
the spatial weights by using 3, 5, and 8 nearest neighbours (polygon 
centroids). The spatial weight matrix is row standardized. Tests on spatial 
dependence as well as on heteroscedasticity indicates that there is no 
misspecification in the models. If I set the tol.solve= option to values 
larger or equal to values derived from the error message (say 1.0e-18), it 
works. Tests showed that parameter estimates and significances are not 
influenced by changing the tol.solve. Since the handbook points out that 
"errors in solve() may constitute indications of misspecification", my 
questions are, what exactly does tol.solve mean, what sort of 
misspecification could it be if I obtain errors and does it influence model 
outputs(particularly significances and parameter estimates) if I lower the 
tol.solve-value to a level as e.g. in the example above.

Best regards

Mario Gellrich