Bayesian clustered coefficients regression with auxiliary covariates assistant random effects

In regional economics research, a problem of interest is to detect similarities between regions, and estimate their shared coefficients in models. this article, we propose mixture finite mixtures clustered regression model with auxiliary covariates that account for demographic or economic characteristics over spatial domain. Our Bayesian construction provides both inference number clusters clustering configurations, estimation parameters each cluster. Empirical performance the proposed illustrated through simulation experiments, further applied study influential factors monthly housing cost Georgia.