Spatial extent of land use externalities in the jakarta fringe: Spatial econometric analysis

Spatial externalities play an important role in determining land value, leading to the application of spatial econometric analysis. Recent studies indicate that the interaction of two competing land use externalities has created sprawl in the Jakartan metropolitan fringe, putting pressure on conservation and productive agricultural sites in the southern fringe. This study analyzes the extent of those externalities and their role in recent development activities in the area, based on spatial econometric models. Four models are considered, and two variables (density and area proportion of agricultural activity) at district level are used to capture the competing externalities (social and green externalities) of land use. The proportion of developed area per district serves as a proxy for development land value. The analysis indicates that the spatial Durbin error model is the best model, and confirms the significant role of spatial externalities on development value, especially for social externalities, although it can only extend locally.