--- name: jegeo-identification description: Use when the inference argument is the bottleneck for a Journal of Economic Geography (JEG) manuscript — spatial causal designs, quantitative-spatial model identification, or case-based geographic inference. Stress-tests the strategy to JEG's two-community bar before exhibits are finalized. --- # Identification Strategy (jegeo-identification) ## When to trigger - A spatial regression rests on OLS + region fixed effects, or TWFE on staggered place-based policy - A quantitative-spatial / NEG model is estimated but it is unclear *what in the spatial data* identifies the key elasticities - Treatment in one region plausibly spills over to "control" regions (SUTVA across space is violated) - A qualitative/comparative-case paper makes a causal-sounding claim with no explicit logic of inference - You are unsure the strategy reads as credible to BOTH an economist and a geographer ## The JEG identification bar Because JEG bridges geographical economics and human geography, "identification" means different things by branch — but in all of them the **spatial structure of the data is part of the identification problem, not a nuisance**. Two threats are nearly universal at JEG and referees expect them confronted head-on: **spatial autocorrelation** in errors (inference) and **spatial spillovers / general-equilibrium leakage** across units (SUTVA). Pick the branch and make the data-to-claim mapping explicit. ## Branch A: Spatial causal design (place-based policy, regional treatment) - **Spatial DID / event study:** with staggered adoption move beyond TWFE (Callaway–Sant'Anna, Sun–Abraham, de Chaisemartin–D'Haultfœuille); show clean event-study leads; report a Goodman-Bacon decomposition. - **Spillovers / SUTVA across space:** the control region is often the treated region's neighbor. Use donut/ring specifications, model spatial spillovers explicitly, or argue why leakage is bounded — do not assume independence across adjacent units. - **Spatial RDD / border designs:** geographic discontinuities (administrative borders) are powerful but demand a continuity argument across the border and attention to what else changes at it. - **IV with a spatial instrument:** Bartik/shift-share and geography-based instruments are common; defend exogeneity of the shares (Goldsmith-Pinkham et al.) or of the shocks, not just first-stage strength. - **Inference:** cluster at the spatial-treatment level AND address spatial correlation across clusters with Conley spatial-HAC standard errors; report how the cutoff distance was chosen. ## Branch B: Quantitative-spatial / NEG model identification - **Name what identifies each structural elasticity** (trade elasticity, agglomeration elasticity, migration elasticity) — tie it to specific spatial variation or moments, not "the estimator converged." - **Calibration vs. estimation:** if elasticities are borrowed, say from where and show the counterfactual is not driven by an indefensible borrowed value; report sensitivity. - **General-equilibrium counterfactuals:** the headline welfare/relocation number depends on the model's spatial linkages — show which parameters and which spatial structure move it. ## Branch C: Case-based / qualitative geographic inference - Make the **logic of inference explicit**: comparative cases, process tracing, or theory-building from a critical case — and state what would have falsified the claim. - Justify case selection on substantive spatial grounds; address generalizability rather than claiming it. ## Shift-share / Bartik instruments in a spatial setting Shift-share instruments are pervasive in economic geography (regional exposure to national shocks via local industry mix), and JEG referees scrutinize them closely. Two defenses, two literatures: - **Exogenous shares (Goldsmith-Pinkham–Sorkin–Swift):** identification rests on the pre-period industry shares being as-good-as-random; defend the shares' exogeneity and report the Rotemberg weights that show which industries drive the estimate. - **Exogenous shocks (Borusyak–Hull–Jaravel):** identification rests on many quasi-random national shocks; defend the shocks and the equivalent shock-level regression. State which justification you rely on — "we use a Bartik instrument" without naming the identifying assumption is exactly the move a JEG referee flags. ## Execution bridge (StatsPAI / Stata MCP) Estimate and audit the design, don't only describe it. Full map: [`execution-with-mcp`](../../../shared-resources/empirical-methods/execution-with-mcp.md). JEG is spatial economics — spatial dependence and sorting; emphasize identification and Conley/spatial-robust inference. - `detect_design` → `recommend` → fit with `as_handle=true` → `audit_result`. - **Observational causal claims:** staggered DiD (`callaway_santanna` / `sun_abraham` + `bacon_decomposition` + `honest_did_from_result`); IV (`effective_f_test` + `anderson_rubin_ci`); RDD (`rdrobust` + `mccrary_test`). - **Experiments:** randomization-based inference + `romano_wolf` for many-outcome control. - **Sensitivity:** `oster_delta` / `sensemakr` for observational claims. Report the magnitude in interpretable units; route the full battery to the appendix. A run end-to-end (synthetic data, real returns) is in the [JF execution walkthrough](../../../Journal-of-Finance-Skills/resources/worked-examples/02-execution-walkthrough.md). ## Checklist - [ ] Branch chosen; the spatial-data-to-claim mapping stated in one sentence - [ ] Spatial autocorrelation addressed in inference (Conley SEs / appropriate clustering; cutoff justified) - [ ] Cross-unit spillovers / SUTVA across space confronted, not assumed away - [ ] Staggered designs use a modern estimator; pre-trends/leads shown - [ ] Structural: each key elasticity tied to identifying spatial variation; counterfactual sensitivity shown - [ ] Qualitative: explicit inference logic + falsification condition + case-selection justification - [ ] The claim never exceeds what the spatial design supports ## Anti-patterns - Default heteroskedastic SEs (or clustering on one dimension) when errors are spatially correlated - Treating neighboring regions as clean controls while the treatment spills across the border - TWFE on staggered place-based policy with no heterogeneity-bias discussion - "The estimator converged" offered as structural identification of agglomeration/trade elasticities - A qualitative paper making a causal claim with no stated logic of inference or falsifier - Reporting significance with asterisks instead of standard errors and confidence intervals ## Worked vignette (illustrative) A special economic zone is rolled out across regions and the paper estimates its effect on firm entry with TWFE and region-clustered SEs. Two JEG referees object: the economist says the zones were placed where growth was already accelerating (selection) and neighboring regions absorbed displaced firms (spillover inflates the gap); the geographer says "region" is the wrong scale because clusters cross administrative lines. The fix routes through all three: a Callaway–Sant'Anna estimator with clean leads (selection on trends), a ring specification isolating displacement (spillover), Conley SEs at a justified distance (spatial correlation), and a re-aggregation to commuting zones (scale). Only then is the entry effect — say a 6% rise, illustrative — credible to both readers. ## Referee pushback mapped to the identification fix - *"Your control regions are the treated region's neighbors — spillover inflates the effect."* → Add ring/donut specs or a spatial-lag model; report the bounded effect net of displacement. - *"Standard errors ignore that adjacent units co-move."* → Conley spatial-HAC SEs over a range of cutoffs; show residual Moran's I. - *"The agglomeration elasticity is calibrated, not identified."* → Name the spatial variation that pins it; show the counterfactual is not driven by a borrowed value. - *"This is a region case study calling itself causal."* → State the inference logic and the falsifier explicitly, or downgrade the causal language. - *"The result is an artifact of the spatial unit."* → Re-estimate at another scale (the MAUP test) — partly a robustness move, but raised at identification. ## Why spatial inference is non-negotiable at JEG Economic-geography data violate the independence assumption almost by construction: nearby places share shocks, labor markets, and institutions. A JEG referee from the economics side treats overstated inference as a fatal flaw, and one from the geography side treats "space as iid error" as conceptually naive. Confronting spatial autocorrelation and spillovers is therefore not a robustness afterthought here — it is part of whether the design identifies anything at all. Decide the spatial error structure and the spillover structure *before* you read the point estimate, so the inference is not reverse-engineered to keep significance. ## Output format ```text 【Branch】spatial-causal / quantitative-spatial-model / qualitative-case 【Spatial-data-to-claim mapping】one sentence 【Spatial autocorrelation】inference fix (Conley / clustering; cutoff) 【Spillovers / SUTVA across space】how confronted 【Identification evidence】leads+Bacon / elasticity-to-variation / inference logic 【What it does NOT identify】[...] 【Next skill】jegeo-theory-model ```