Dear list members,

I am a GIS programmer at Hungarian Central Statistical Office, and
trying to make a work about statistical connections between time
required to reach some source (e.g. the capitol, the border crossing
points, or local civil services) and local social parameters (this first
time the governmental tax/person - as an indicator of the income).
 
I have computed the required time data via network analysis for each
localities, and have the respond variable. Using R I have made some
linear fittings between time as predictor and the paid tax/person as
respondent, but, I suspect, the strong linear correlation I found is an
outcome from the spatial autocorrelation in the tax data.

I have mapped the local spatial autocorrelation for these data, and
found that it shows positive, negative and insignificant spatial
autocorrelations between the neighbours in large, well separated
continuous areas. The same areal distribution is typical for the
residuals from the linear correlation. 

My question is: should I use geostatistical methods based on variogram? 
The argument to support this method is: My predictor is a distance-like
value - in fact the time which is a function of the available speed on
the road segments and the distance between localities. 
The argument against this method: My data are not from spatially
continual variable(s), because there is not living people between
settlements.

Or should I include a "spatial lag"  - the local average of the data
weighted by the inverse distance (time) - into the regression?
I strongly suspect, that this later method is the better solution, but
can someone direct me to a publication about similar work?

Please, excuse me for this longish "question".

Thank you in advance
Jozsef Fabian
GIS programmes
HCSO Hungary

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