Geographically and Temporally Weighted Regression (GTWR) for Modeling Economic Growth using R

Abstract

Economic growth is a main condition for the sustainability of regional economic development. Spatially, the highest economic growth in Indonesia is dominated by provinces in Java. However, the economic growth rate of Central Java Province is the lowest economic growth compared to other provinces. The Geographically and Temporally Weighted Regression (GTWR) method performed to model the economic growth of the Central Java Provincial districts by accommodating the influence of spatial-temporal heterogeneity. This modeling involves four explanatory variables e.g, number of labor force, local revenue, district minimum wage, and human development index with response variable gross regional domestic product. The results of the analysis showed that GTWR method has better coefficient determination (99.8%) with root mean squared error and Akaike's Information Criterion values of 0.84 and 1051.98. In general, HDI gives more influence to economic growth at each regency / city in Central Java during 2011-2015.