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How to efficiently generate data of neighboring points

Thank you once again. To clarify, which is more suitable, end of year water
levels or yearly average measure of water levels?

Also below are a few more notes to throw more light on my variables/data:

These wells are solely for irrigation purposes and are
irrigator/farmer-owned and operated.
No farmer/irrigator moves to another well not owned by him. The only reason
to suspect any spatial externalities is because the wells share a common
aquifer.
And this is essentially what I am testing.

It is also understood that there are not much variation in the geography
and geology of the study region.

I have data a number of well specific features in addition to the water
level. I also have some farm data including cropping and technology use
data. No soil data though.
No recharge data too as well.

In fact, I agree a lot factors can come to play here and I may not have or
observe all but I was thinking I could incorporate some fixed effects
to take care of those, especially for those I suspect (or perhaps by
theory) are likely to not vary much in terms of their effect on
irrigation(pumping) decisions across farmers
or effect on water level.

My panel is rather a short one: I have a five year panel data.

Given the above, is it still not advisable to use any spatial econometric
analysis? Just a simple OLS will suffice?

Thanks.
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Lom
On Fri, Jun 5, 2020 at 3:51 AM Roger Bivand <Roger.Bivand at nhh.no> wrote:

            

  
  

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