Spatial Spillover Effects on Poverty in Indonesia: Evidence from Panel Data Analysis

Abstract

Poverty in Indonesia remains a persistent issue characterized by uneven distribution and strong regional disparities. This study analyzes the determinants of poverty across 34 provinces in Indonesia from 2015 to 2024 by incorporating spatial dimensions to capture interregional linkages. Using a quantitative approach with panel spatial econometric models, this research evaluates the effects of economic growth, unemployment, population density, human development, infrastructure access, inequality, and household expenditure on poverty rates. The findings indicate significant spatial dependence, confirming that poverty conditions in one region are influenced by those in neighboring regions. Structurally, the Human Development Index (HDI), access to safe drinking water, proper sanitation, and per capita expenditure show a significant negative effect on poverty. Meanwhile, macroeconomic indicators such as Gross Regional Domestic Product (GRDP) growth and unemployment rates do not show a significant impact on poverty reduction, suggesting that economic growth has not been fully inclusive. The results also indicate that the Spatial Durbin Model provides the best model fit in explaining regional poverty dynamics. These findings highlight the importance of regionally integrated development strategies that prioritize human development and basic infrastructure rather than relying solely on aggregate economic growth.