There is a schism in the geostatistical community
between those who do and those who don't make gamma(0)
equal to 0.
Some people argue that the nugget effect is 'sampling
error' and that gamma(0) should equal c0 so that
kriging does not honour the data values. It also makes
your kriging variances smaller (emphasis).
I (personally) find it a bit weird to have smaller
supposed errors if you do not trust your data.
Software packages differ as to whether they do or do
not go to zero. Simplest way to check is to replace
your nugget effect by a spherical component with a
very short range of influence and see if your answers
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