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Household Size and Household Wealth in Indonesia with the Influence of Spatial Aspects

Author

Listed:
  • Thomas Soseco

    (Universitas Negeri Malang)

Abstract

Investigating household wealth should also include spatial analysis to capture the influence of location on the households' net wealth and to avoid underestimation of the effect of the change of variables due to estimation that ignores spatial aspects. This paper examines factors influencing household net wealth in Indonesia with the influence of spatial lag using data from the Indonesian Family Life Survey (IFLS) for 1993–2014. The article relies on the Spatial Durbin Model (SDM) to analyze the data. Results show that household net wealth in Indonesia is spatially related to each other, and the spillover effect makes the change of household net wealth in Indonesia dominated by the change of variables in neighbouring regions. Furthermore, considering the time component, there is a positive effect of households' size on households' net wealth due to the time component concerning the spatial lag of the dependent and independent variables.

Suggested Citation

  • Thomas Soseco, 2022. "Household Size and Household Wealth in Indonesia with the Influence of Spatial Aspects," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 68, pages 75-86, Desember.
    • Handle: RePEc:lpe:efijnl:202206
    as

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    References listed on IDEAS

    as
    1. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    2. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6, National Bureau of Economic Research, Inc.
    3. J. Elhorst, 2010. "Applied Spatial Econometrics: Raising the Bar," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(1), pages 9-28.
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    More about this item

    Keywords

    Spatial Durbin Model; households; wealth; spillover;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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