“…The effect of correlated residuals on parameter estimates has been recognized in agricultural research for a long time, but in practice this has been almost exclusively addressed in experimental studies involving variety trials, where the use of some variation of the nearest neighbors approach has become common, (Wilkinson et al, 1983, Bhatti et al, 1991 and other recently adopted methods based on geostatistics (Ball et al, 1993, Brownie et al, 1993, Stroup et al,1994. In a reduced number of regression analyses in the area of precision agriculture, spatial correlation was accounted for in the estimation of β by the use of basically three different approaches: nearest-neighbors analysis (Mamo et al, 2003, Bermudez andMallarino, 2003), direct covariance representation (Lark and Wheeler, 2003;Kaspar et al, 2004) and spatial autoregression (SAR, Long, 1998;Florax et al, 2002;Anselin et al, 2002). In this paper, for purposes of accounting for spatial correlation in regression residuals, we deal only with the direct covariance representation and SAR methods.…”