ENRICHING THE SOCIO-ECONOMIC INEQUALITY MODEL BY USING ALTERNATIVE INDICES

This study aims to investigate regional socioeconomic inequality (SEI) using alternative indices. The fruitful indices of the SEI with a different perspective from those found in previous studies are the main contribution to the literature. Afterward, a dynamic spatial panel model (GMM) is used to analyze the effect of human capital, economic growth, and spatial distance for the regions on the SEI. To simplify the ideas, it uses Aceh Province with 23 regencies, as one of the appropriate regions, for this study. Data are obtained from various government sources for the period 2010-2018. The results show that the indices demonstrate the economic strengths and weaknesses, economic capability, environmental input efficiency, and conditional weighted SEI of the regions’ human capital. These indices explain that human capital has a critical role on the effect of natural resources, government income, conflict, and natural disasters on the SEI. Besides, the spatial distance of regions also plays an important role in reducing the SEI of regions. Therefore, the regional development policies should underline the important role of those in supporting the quality of the SEI of the regions. For future research, it suggests involving a spatial distance of regions in determining the SEI of a region.