Spurious weather effects
Jo Thori Lind
Journal of Regional Science, Volume 59, Issue 2, November 2018.
Rainfall is exogenous to human actions and hence popular as an exogenous source of variation. But it is also spatially correlated. This can generate spurious relationships between rainfall and other spatially correlated outcomes. As an illustration, rainfall on almost any day of the year has seemingly high predictive power of electoral turnout in Norwegian municipalities. In Monte Carlo analyses, I find that standard tests reject true null hypotheses in as much as 99% of cases. Standard approaches to estimating consistent standard errors do not solve the problem. Instead, I suggest controlling for spatial and spatiotemporal trends using multidimensional polynomials.