Spatial Dependencies in Environmental Quality: Identifying Key Determinants

Introduction/Main Objectives: Environmental quality is essential to human development because it reflects the condition of our natural surroundings. Background Problems: Understanding the determinants of environmental quality is crucial for Indonesia as it helps identify the key factors influencing environmental quality. Novelty: Spatial models offer detailed, locationspecific insights but require extensive data and computational resources, while non-spatial models provide a broader overview with simpler data requirements but may miss important spatial nuances. This study seeks to identify the determinants of environmental quality in regencies and municipalities on Java Island, incorporating spatial effects into the analysis. Research Methods: The dependent variable is environmental quality index. The independent variables are GRDP in industrial sector, GRDP in agricultural sector, urban population rate, population density, and poverty rate. We applied spatially lag regression model using contiguity spatial weight matrix. Finding/Results: This study shows the spatially lag regression model outperforms the OLS model. GRDP in the industrial sector, GRDP in the agricultural sector, urban population rate, and population density have negative effects, suggesting the increases in these variables were associated with lower environmental quality. About 40%–44% of each variable's effect on environmental quality is due to spatial spillover effects.