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Jurnal Ekonomi Malaysia

60 (1) 2026 –

Gravity of Income Inequality and Spatial Model in Java-Bali, Indonesia

Faculty of Economics and Business
Universitas Sumatera Utara

arifrahman@usu.ac.id

Faculty of Economics and Business
Universitas Sumatera Utara

sirohasyim@gmail.com

Faculty of Economics and Business
Universitas Sumatera Utara

wahyuario@gmail.com

Faculty of Economics and Business
Universitas Sumatera Utara

irsad@usu.ac.id

Faculty of Economics and Business
Universitas Sumatera Utara

sukmahayatihakim@usu.ac.id

Faculty of Economics and Business
Universitas Sumatera Utara

nurmalafitri@usu.ac.id

Abstract

This study analyses the level of income inequality in the Java-Bali region from 2015 to 2022, examining the direct, spillover, and mediating effects of key determinants using centre-of-gravity, spatial and mediation analysis. Results indicate that overall  income inequality is relatively low although  welfare distribution across provinces remains uneven. Spatial estimates show that  higher real GRDP per capita reduces individual income inequality, while a larger share of highly-educated workers is associated with greater inequality. Higher population density increases income levels but also exacerbates inequality. Other factors including environmental quality, labour dependency ratios, regional expenditure, and democratic conditions do not exhibit statistically significant effects on inequality. GRDP gap analysis reveals that higher real GRDP per capita and greater labour dependency widen the GRDP gap between Java-Bali and other islands. Conversely, higher education attainment, increased population density, and stronger democratic conditions contribute to narrowing the inter-island gap, with significant regional spillover effects. Mediation results indicate that real GRDP per capita does not mediate the effects of exogenous variables on the Gini coefficient, but it does mediate the effects of population density and regional expenditure on the GRDP gap. Overall, the study provides a comprehensive assessment of inequality combining Gini coefficients and GRDP gap measures. The findings highlight the importance of enhancing productivity through improving human capital, strengthening regional growth nodes, improving the effectiveness of public expenditure, and strengthening democratic institutions to achieve more equitable welfare outcomes.

 

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Rahman, Arif and , and Pratomo, Wahyu Ario and Lubis, Irsad and Hakim, Sukma Hayati and Fitri, Nurmala (2026). Gravity of Income Inequality and Spatial Model in Java-Bali, Indonesia. Jurnal Ekonomi Malaysia, 60(1), –.

@article{,
  title={Gravity of Income Inequality and Spatial Model in Java-Bali, Indonesia},
  author={Rahman, Arif and , and Pratomo, Wahyu Ario and Lubis, Irsad and Hakim, Sukma Hayati and Fitri, NurmalaRahman, Arif and , and Pratomo, Wahyu Ario and Lubis, Irsad and Hakim, Sukma Hayati and Fitri, Nurmala},
  journal={Jurnal Ekonomi Malaysia},
  volume={60},
  number={1},
  pages={—},
 

year={2026},
}

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