Spatial panel dynamic econometrics model of land value: case study of land use externalities and their dynamic in the Jakarta's fringe

Land value is the product of past decision of its use. It is also affected by the observed externalities. The effect of each factor on land value has dynamic and spatial virtues, which can be captured based on an empirical model using a spatial panel dynamic setting. The model is useful to estimate the extent and the dynamic nature of land use externalities, important information to formulate an effective urban growth management's policy. The objective of this paper is to derive the instant and the dynamic indirect effects externalities on land value.The result is applied to analyse the significance of land use externalities on agricultural land value in the Jakarta's fringe. The analysis indicates the significance of the negative externalities, the previous land value and the local accessibility . The effects are accumulated dynamically over years, but they will fully affect the land value after 6 years.