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Spatial quantile autoregressive model : case study of income inequality in Indonesia

Substantial economic development in Indonesia has dramatically increased inequality in the last decade. This issue will hinder the country’s long-term economic development as well as creating socioeconomic instability and violence. This study analysed the effects of macroeconomic factors such as gro...

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Main Authors: Lusiana, Evellin Dewi, Pramoedyo, Henny, Sudarmawan, Barianto Nurasri
Format: Article
Language:English
Published: Universiti Kebangsaan Malaysia 2022
Online Access:http://journalarticle.ukm.my/21032/1/SBL%2023.pdf
http://journalarticle.ukm.my/21032/
http://www.ukm.my/jsm/index.html
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spelling my-ukm.journal.210322023-02-03T08:27:13Z http://journalarticle.ukm.my/21032/ Spatial quantile autoregressive model : case study of income inequality in Indonesia Lusiana, Evellin Dewi Pramoedyo, Henny Sudarmawan, Barianto Nurasri Substantial economic development in Indonesia has dramatically increased inequality in the last decade. This issue will hinder the country’s long-term economic development as well as creating socioeconomic instability and violence. This study analysed the effects of macroeconomic factors such as gross regional domestic product, investment, unemployment rate, and labour-force participation, on Indonesian provinces’ inequality. Since the economic development in Indonesia is mostly concentrated on Java Island, a spatial based analysis was appropriate. In addition, we also considered a method that enabled a specific level of inequality modelling, since previous studies used a mean-based analysis. Therefore, we proposed a spatial quantile autoregressive (SQAR) technique. The results showed that the Gini index of Indonesian provinces had a significant positive spatial autocorrelation (SA). Regions with similar Gini index values tended to cluster together. In addition, local analysis of the SA showed Java Island as a region that was characterized by high inequality, while Sumatra and Kalimantan Island were not. By contrast, the SQAR model suggested that there were various effects of macroeconomic factors on inequality at different levels of quantile. As a consequence, distinct approaches to handling inequality should be taken for provinces with low, medium, and high Gini index values. Universiti Kebangsaan Malaysia 2022 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/21032/1/SBL%2023.pdf Lusiana, Evellin Dewi and Pramoedyo, Henny and Sudarmawan, Barianto Nurasri (2022) Spatial quantile autoregressive model : case study of income inequality in Indonesia. Sains Malaysiana, 51 (11). pp. 3795-3806. ISSN 0126-6039 http://www.ukm.my/jsm/index.html
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description Substantial economic development in Indonesia has dramatically increased inequality in the last decade. This issue will hinder the country’s long-term economic development as well as creating socioeconomic instability and violence. This study analysed the effects of macroeconomic factors such as gross regional domestic product, investment, unemployment rate, and labour-force participation, on Indonesian provinces’ inequality. Since the economic development in Indonesia is mostly concentrated on Java Island, a spatial based analysis was appropriate. In addition, we also considered a method that enabled a specific level of inequality modelling, since previous studies used a mean-based analysis. Therefore, we proposed a spatial quantile autoregressive (SQAR) technique. The results showed that the Gini index of Indonesian provinces had a significant positive spatial autocorrelation (SA). Regions with similar Gini index values tended to cluster together. In addition, local analysis of the SA showed Java Island as a region that was characterized by high inequality, while Sumatra and Kalimantan Island were not. By contrast, the SQAR model suggested that there were various effects of macroeconomic factors on inequality at different levels of quantile. As a consequence, distinct approaches to handling inequality should be taken for provinces with low, medium, and high Gini index values.
format Article
author Lusiana, Evellin Dewi
Pramoedyo, Henny
Sudarmawan, Barianto Nurasri
spellingShingle Lusiana, Evellin Dewi
Pramoedyo, Henny
Sudarmawan, Barianto Nurasri
Spatial quantile autoregressive model : case study of income inequality in Indonesia
author_facet Lusiana, Evellin Dewi
Pramoedyo, Henny
Sudarmawan, Barianto Nurasri
author_sort Lusiana, Evellin Dewi
title Spatial quantile autoregressive model : case study of income inequality in Indonesia
title_short Spatial quantile autoregressive model : case study of income inequality in Indonesia
title_full Spatial quantile autoregressive model : case study of income inequality in Indonesia
title_fullStr Spatial quantile autoregressive model : case study of income inequality in Indonesia
title_full_unstemmed Spatial quantile autoregressive model : case study of income inequality in Indonesia
title_sort spatial quantile autoregressive model : case study of income inequality in indonesia
publisher Universiti Kebangsaan Malaysia
publishDate 2022
url http://journalarticle.ukm.my/21032/1/SBL%2023.pdf
http://journalarticle.ukm.my/21032/
http://www.ukm.my/jsm/index.html
_version_ 1758579324684861440
score 13.211869

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