Causal inference in spatial settings is met with unique challenges and opportunities. In spatial settings, a unit's outcome might be affected by the exposure at many locations and the confounders might be spatially structured. Using causal diagrams, we investigate the complications that arise when investigating causal relationships from spatial data. We illustrate that spatial confounding and interference can manifest as each other, meaning that investigating the presence of one can lead to wrongful conclusions in the presence of the other. We also show that statistical dependencies in the exposure can render standard analyses invalid, which can have crucial implications for understanding the effect of interventions on dependent units. Based on the conclusions from this investigation, we propose a parametric approach that simultaneously accounts for interference and mitigates bias from local and neighborhood unmeasured spatial confounding. We show that incorporating an exposure model is necessary from a Bayesian perspective. Therefore, the proposed approach is based on modeling the exposure and the outcome simultaneously while accounting for the presence of common spatially-structured unmeasured predictors. We illustrate our approach with a simulation study and with an analysis of the local and interference effects of sulfur dioxide emissions from power plants on cardiovascular mortality.

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