Journal of Applied Econometric

Economic Development Conditions and Their Effects on Growth Indicators Drawn from Statistics Indonesia Economic Data

Ikhsan Nendi — 2026-01-20

Background:
Understanding how economic development conditions interact to influence growth outcomes is critical for policymakers in emerging economies, especially as nations navigate post-pandemic recovery and address challenges from technological disruption and climate change.
Objective:
This study examines the relationship between multidimensional development conditions and growth indicators in West Java Province, Indonesia's most populous and economically diverse region. The goal is to assess how various development factors impact economic growth outcomes, such as GDP growth, employment creation, poverty reduction, and human development index outcomes.
Method:
The research analyzes panel data from 27 districts and cities over the period 2019–2023. Fixed-effects regression models are employed to assess the effects of infrastructure quality, human capital levels, institutional capacity, sectoral composition, and trade openness on economic performance indicators.
Findings and Implications:
The findings reveal that infrastructure investment significantly enhances GDP growth (coefficient 0.048, p<0.01), while human capital emerges as the strongest driver of employment growth (0.041, p<0.01) and poverty reduction (-0.095, p<0.01). These results provide evidence-based guidance for policymakers on how to prioritize development investments and create integrated strategies that leverage the synergies between infrastructure, human capital, and institutional improvements tailored to regional contexts.
Conclusion:
The study emphasizes that sustainable regional development requires a multidimensional approach rather than single-factor interventions. Policymakers should focus on developing integrated strategies that combine investments in infrastructure, human capital, and institutional capacity. Future research should explore spatial spillover effects and the long-term causal mechanisms that drive economic transformation.

Economic Impacts of Minimum Wage Policy Adjustments in Indonesia: A Panel Analysis of Provincial Data

Imam Safei Muslim — 2026-01-25

Background:
This study investigates the economic impacts of minimum wage policy adjustments across Indonesian provinces using panel data from 2010 to 2023. The research aims to explore how changes in minimum wage at the provincial level affect key economic indicators, such as employment rates, GDP growth, poverty levels, and income inequality.
Objective:
The objective of this research is to empirically assess the effects of provincial minimum wage changes on economic indicators. The focus is on understanding how these adjustments impact employment, economic growth, and social outcomes in Indonesia.
Method:
The study employs fixed-effects panel regression models with provincial and time dimensions. It controls for province-specific heterogeneity and common time shocks, analyzing 34 provinces over 14 years (2010-2023), totaling 476 province-year observations. This methodology is used to identify the causal effects of minimum wage changes on the selected economic indicators.
Findings and Implications:
The findings indicate nuanced effects of minimum wage increases. Formal sector employment shows a modest negative impact (elasticity of −0.15), especially in labor-intensive manufacturing sectors, while informal sector employment rises by 0.23% for each 10% wage increase. GDP growth is positively correlated with minimum wage levels (elasticity of 0.08), suggesting that wage-driven consumption outweighs competitiveness concerns.
Conclusion:
This study provides rigorous province-level evidence from Indonesia’s diverse economic landscape, demonstrating the importance of understanding the broader macroeconomic context in shaping the effectiveness of labor policies like minimum wage adjustments. Policymakers must optimize these frameworks to ensure balanced economic growth, poverty reduction, and reduced income inequality across provinces.

Digital Financial Use and Its Effects on Household Economic Decisions Derived from the Statistics Indonesia Socioeconomic Data

Nunung Wulan Sari — 2026-01-25

Background:
The rapid proliferation of digital financial services in Indonesia has dramatically transformed household economic behavior. However, a comprehensive understanding of these effects across diverse socioeconomic contexts remains limited.
Objective:
The objective of this study is to examine the effects of digital financial services on household economic decisions, utilizing socioeconomic data from Badan Pusat Statistik (Statistics Indonesia). The study aims to assess how digital finance adoption influences consumption expenditure, savings, risk management, and access to formal credit.
Method:
The study employs a quantitative research design, analyzing data from 500 households.
Findings and Implications:
Digital finance adoption increases household consumption by 18.6%, raises savings rates by 4.8 percentage points, and boosts formal savings account ownership by 32.4%. Users also demonstrate stronger risk management, with 64.8% maintaining adequate emergency funds (compared to 38.6% of non-users), and enjoy higher formal credit approval rates of 72.6%. The greatest benefits are observed among urban, educated, and middle-income households. These results offer valuable insights for policymakers to optimize digital financial inclusion strategies, emphasizing the need for complementary interventions to address infrastructure gaps, improve financial literacy, and strengthen consumer protection.
Conclusion:
The study underscores the importance of digital financial services in shaping household economic decisions and highlights the need for targeted interventions to ensure equitable access across diverse socioeconomic groups. Policymakers should focus on enhancing infrastructure, financial literacy, and consumer protection mechanisms to maximize the benefits of digital financial inclusion for all segments of the population.

Digital Finance Usage and Its Impact on Consumer Economic Behavior Based on National Data

Umamah Mumtazah Askhiyah — 2026-01-15

Background:
The rapid proliferation of digital financial technologies has dramatically transformed consumer engagement with financial services. However, the comprehensive impact of digital finance on economic behavior remains inadequately understood. The shift toward digital finance is reshaping how households interact with financial services, but its full effects on consumer economic behavior are yet to be explored.
Objective:
This study aims to examine the causal and correlational relationships between the intensity of digital finance usage and multiple dimensions of consumer economic behavior, using nationally representative household survey data.
Method:
The research employs propensity score matching, instrumental variable estimation, and panel data methods to analyze the data. These techniques allow for a thorough understanding of the impact of digital finance adoption on household consumption, savings, financial literacy, and other economic behaviors.
Findings and Implications:
The study finds that digital finance adoption increases household consumption expenditure by 8.7%, yet paradoxically reduces savings balances by 5.8%, despite improving formal financial inclusion. Digital finance users show significantly enhanced financial literacy, planning behavior, and management practices, with financial literacy scores rising by 1.4 points after adoption. However, vulnerable populations, particularly young lower-middle-income households, experience higher debt-to-income ratios and more frequent payment difficulties.
Conclusion:
The research highlights the importance of digital finance in improving financial inclusion and consumer economic behavior, yet it also emphasizes the need for targeted regulatory approaches. Policymakers should focus on promoting digital finance while ensuring safeguards for vulnerable populations to mitigate the associated risks, such as increased debt levels and payment difficulties.

Exchange Rate Fluctuations and Their Impact on Inflation: An Analysis Using National Data

Diana Magfiroh — 2026-02-13

Background:
Exchange rate fluctuations pose a critical challenge for modern economies, particularly in a globalized financial environment. The relationship between exchange rates and inflation is a key concern for policymakers, central banks, and economic researchers, as fluctuations in exchange rates can significantly influence domestic price levels and overall economic stability.
Objective:
This study aims to analyze the dynamic relationship between exchange rate fluctuations and inflation, focusing on the magnitude, asymmetries, and long-term effects of exchange rate pass-through to inflation in national economies. The goal is to better understand how exchange rate movements impact inflation and inform policy responses.
Method:
The research employs a quantitative approach using time series econometric analysis, specifically the Autoregressive Distributed Lag (ARDL) bounds testing method. Data were collected from national macroeconomic indicators for the period of 2005–2024.
Findings and Implications:
The findings reveal that exchange rate fluctuations have a significant pass-through effect on inflation. A 10% depreciation in the exchange rate leads to a 3.42% increase in inflation. Asymmetric effects were observed, where depreciation causes larger inflationary pressures than appreciation. These results emphasize the importance of incorporating exchange rate movements into inflation forecasting and policymaking, especially for countries with significant import dependencies.
Conclusion:
The study highlights the critical role of exchange rate fluctuations in inflation dynamics and underscores the need for policymakers to incorporate exchange rate movements into their inflation forecasting models and macroeconomic strategies. Future research should explore sector-specific impacts and consider the influence of global economic conditions in shaping the exchange rate-inflation relationship.