Modeling Human Development Index of Bali with Spatial Panel Data Regression

Human development index (HDI) is an index that represents the successfulness of human development in a region. For Bali, one of 34 provinces in Indonesia, the progress of HDI in the period 2010–2017 showed an increasing trend. In the year 2010, the Bali’s HDI is accounted for 70.10, gradually increase to 74.30 in the year 2017. However, in 2017 there are some regions with their HDIs are below of Bali’s HDI, namely Jembrana, Buleleng, Klungkung, Bangli, and Karangasem. The aim of this work is to model the HDI of 9 regencies of Bali so that the main determinant to increase the HDIs especially for the regencies with lower HDIs could be determined. The model consists of one dependent variable (HDI) with three indicators as the independent ones, there are (a) life expectancy, (b) education, and (b) standard of living. By applying spatial panel data analysis, five models were built i.e. CEM, FEM (individual), FEM (time), REM, and spatial autocorrelation FEM to determine the effect of each indicator. The result shows the best model is spatial autocorrelation FEM in which the health index has the biggest influence compare to the others.