spatial regression with (partly) overlapping areas

#1
Dear forum,
Is it statistically correct to calculate a regression with overlapping areas? I have market areas as the spatial unit with different sociodemographic and (macro)economic variables and I´m examining their influence on insurance demand. The market areas are overlapping in some areas. According to the spatial distribution I suppose there´s a spatial autocorrelation. Firstly I can calculate simple multiple linear reg. and then run the Moran I. test to check for spatial autocorrelation. But I´m not sure if I can do so when lots of my market areas are overlapping? (I cannot aggregate the data up to a higher level because then I´d have too few cases (about 50)).
I´ve just found some papers dealing with overlapping observations in time models:
https://pdfs.semanticscholar.org/c830/33c957f103b6561038589682ab807bba8c3b.pdf
https://pdfs.semanticscholar.org/3d59/d8106ae0ff9310ce5ac95e19f4e9ab6d505a.pdf
but I haven´t found anything dealing with spatial overlapping. Do you know some methods, useful transformations etc. how to solve this problem with spatial overlapping or is it possible at all?
I´d really appreciate any comment or help!
Thank you in advance!