In plant breeding trials and other experiments with many treatments, there
may be spatial effects due to large-scale trends and small-scale autocorrel
ation. Geostatistical analysis may be used to investigate the extent of spa
tially structured variation. When spatial structure is present, neighbor an
alysis can be superior to classical analysis of variance (ANOVA). The objec
tives of this study were to assess the validity and efficiency of neighbor
analysis and to investigate the extent of spatially structured variation in
cereal breeding trials. Three neighbor analysis methods (the Papadakis pro
cedure, the iterated Papadakis method, and the first differences with error
s in variables [FD-EV]) were applied to data from uniformity trials and to
data from a set of 361 cereal breeding trials. The iterated Papadakis metho
d consistently underestimated the variance, producing tests with highly inf
lated Type I error rates. Thus, its relative effiiciency could not be estim
ated correctly. Geostatistical analysis indicated that spatially structured
variation was frequently present in the cereal breeding trials, and that f
irst differencing was effective in removing it. The FD-EV analysis consiste
ntly improved the accuracy and precision of the estimation of entry effects
compared with classical analysis of variance and Papadakis analysis. Effic
iency relative to classical analysis of variance averaged 152% for FD-EV an
d 116% for the Papadakis procedure. Considering both validity and efficienc
y, FD-EV was the best method. In the presence of spatially structured varia
tion, FD-EV can improve the interpretation of data from field trials. In th
e absence of spatial structure, FD-EV causes no loss of efficiency.