Assessing Fishery Households Welfare in Indonesia: Panel Spatial Durbin Model Approach

The welfare of fishermen, as indicated by the value of NTN, is the government's focus in supporting economic growth and national development. The NTN, or Nilai Tukar Nelayan (Fihermen Exchange Rate), is estimated based on the prices of goods and services in terms of production, costs, and household consumption. However, the government needs to recognize how macroeconomic assumptions affect the welfare of fishermen in Indonesia as a basis for budget planning and national development programs. Therefore, this study aims to comprehensively analyze the welfare of fishermen in Indonesia using a spatial Durbin panel model approach. Provincial (spatial) secondary data from 2020 to 2022 involved variables of fishermen’s Exchange Rates, Human Development, Population Density, inflation, agricultural sector labor, and average daily wages. It is new and interesting to include regional influences in determining the right policies to alleviate poverty in fishermen in Indonesia, considering the geographical conditions of Indonesia, which consists of islands. This study found that the Durbin spatial panel model is the best model for the data used and that the human development index (HDI) and inflation variables had a significant and positive effect on the welfare of fishing households in Indonesia. Therefore, it is important for the Indonesian government to reduce the poverty rate of fishermen by improving the skills and innovation of fishermen, development gaps, and controlling inflation.