Evaluation of Simultaneous and Simultaneous Spatial Autoregressive Equation with Three Stage Least Square Method (Case Study on GRDP, Poverty and Unemployment Data in Papua in 2018)
Keywords:
simultaneous, simultaneous spatial autoregressive regression, three stage least squareAbstract
In the simultaneous equation (SM), the dependent variable in an equation could be an independent variable in another equation. Dependent variables are called endogenous variables and independent variables are called exogenous variables. If the observations in SM are locations and contain spatial autocorrelation, then a spatial dependency model can be added. Adding dependencies to endogenous variables is modeled as spatial autoregressive regression (SAR). Addition of SAR to the SM model hereinafter referred to as simultaneous spatial autoregressive regression (SM SAR). Estimation of parameters in the SM SAR can use the Three Stage Least Square (3SLS) method as used in SM. This study aims to predict this SM SAR model on GRDP, poverty and unemployment data in Papua in 2018. SM consists of three equations. The weight matrix used in each equation can be the same or a combination of inverse distance, rook contiguity, exponential weight and K-NN matrices. The results showed the addition of SAR in SM could reduce MSE by 0.31and an increase in R2 by 4.68% compared to the SM model.
References
. C. Wieser. “Determinants of the Growth Elasticity of Poverty Reduction. Why the Impact on Poverty Reduction is Large in Some Developing Countries and Small in Others”, in WIFO Working Papers No.406, 2011, pp. 1-52.
. A. Jonaidi. “Analisis Pertumbuhan Ekonomi Dan Kemiskinan Di Indonesia (Analysis of Economic Growth and Poverty in Indonesia)”. Jurnal Kajian Ekonomi (Journal of Economic Studies), vol.1, no.1, pp. 140-164, 2012.
. C.Yuan and A.D. Huruta. “Okun's law in an emerging country: An empirical analysis in Indonesia”. International Entrepreneurship, vol. 5, no.4, pp. 141-161, Dec. 2019.
. S. Susanti. “Pengaruh produk domestik regional bruto, pengangguran dan indeks pembangunan manusia terhadap kemiskinan di Jawa Barat dengan menggunakan analisis data panel (The influence of gross regional domestic product, unemployment and human development index on poverty in West Java using panel data analysis)”. Jurnal Matematika Integratif (Journal of Integrative Mathematics), vol. 9, pp. 1-18, 2013.
. A. Zellner and H. Theil. “Three-stage least squares: simultaneous estimation of simultaneous equations”. Econometrica. 1st ed, vol. 30, pp. 54-78, 1962.
. H.H. Kelejian and I.R. Prucha. “Estimation of simultaneous systems of spatially interrelated cross sectional equations”. Journal of Econometrics, 118th ed, vol. 2, 2004, pp. 27-50.
. S. Sarraf. 2012. “Three essays on social, dynamic and land-use change: Framework, model and estimator”. Urbana, Illinois (US): University of Illinois at Urbana-Champaign. pp. 1-121.
. J. Hausman. “Specification test in econometrics”. Econometrica. 46th ed., vol. 6, pp.1251-1271. 1978.
. J. Lee and D.W.S. Wong. “Spatial Autocorrelation” in Spatial Analysis Techniques Using MyGeoffice®. J.G.M. Negreiros, Ed. Hershey PA, USA: IGI Global, 2018. pp. 1-334.
. S. Chatterjee and A.S. Hadi. Regression Analysis by Example. 4th ed., New York, US: John Wiley and Sons, 2006, pp.1-371.
Downloads
Published
How to Cite
Issue
Section
License
Authors who submit papers with this journal agree to the following terms.