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Econometric Modelling of the Rural Poverty, Unemployment and the Agricultural Sector Using a Truncated Spline Approach with Longitudinal Data

Author

Listed:
  • Sanusi Fattah

    (Department of Economics, Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia)

  • Abd Rahman Razak

    (Department of Economics, Faculty of Economics and Business, Hasanuddin University, Makassar 90245, Indonesia)

  • Mohammad Amil Yusuf

    (Department Accounting, Faculty of Economic and Business, Hasanuddin University, Makassar 90245, Indonesia)

  • Adji Achmad Rinaldo Fernandes

    (Department of Statistic, Faculty of Mathematics and Natural Sciences, Brawijaya University, Malang 65111, Indonesia)

Abstract

Rural poverty and unemployment remain persistent challenges in Indonesia, particularly in regions where agricultural development is uneven and land conversion accelerates socio-economic disparities. These conditions are highly relevant because rural areas serve as the backbone of food security, labour supply, and national economic stability. This study aims to address these issues by developing a flexible analytical framework that simultaneously models three indicators of rural development—rural poverty, rural unemployment, and agricultural sector growth—using a truncated spline nonparametric regression approach with longitudinal data from 2015 to 2023. The methodological approach integrates this regression with panel data across five Indonesian regions, allowing the analysis to capture nonlinear relationships and regional variations that conventional parametric models may overlook. The results indicate that population migration, land use change, and village fund allocation are the dominant drivers of rural development indicators, with nonlinear and region-specific effects. Village funds consistently reduce poverty and unemployment, while excessive land conversion restricts agricultural sector growth. The findings contribute to theory by demonstrating the advantages of flexible nonparametric approaches in modelling rural development dynamics, and to practice by offering empirical evidence for more targeted and adaptive policy interventions to alleviate poverty, reduce unemployment, and strengthen rural resilience.

Suggested Citation

  • Sanusi Fattah & Abd Rahman Razak & Mohammad Amil Yusuf & Adji Achmad Rinaldo Fernandes, 2025. "Econometric Modelling of the Rural Poverty, Unemployment and the Agricultural Sector Using a Truncated Spline Approach with Longitudinal Data," Economies, MDPI, vol. 13(9), pages 1-23, September.
  • Handle: RePEc:gam:jecomi:v:13:y:2025:i:9:p:273-:d:1750291
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    References listed on IDEAS

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    1. Made Ayu Dwi Octavanny & I. Nyoman Budiantara & Heri Kuswanto & Dyah Putri Rahmawati, 2020. "Nonparametric Regression Model for Longitudinal Data with Mixed Truncated Spline and Fourier Series," Abstract and Applied Analysis, John Wiley & Sons, vol. 2020(1).
    2. Made Ayu Dwi Octavanny & I. Nyoman Budiantara & Heri Kuswanto & Dyah Putri Rahmawati, 2020. "Nonparametric Regression Model for Longitudinal Data with Mixed Truncated Spline and Fourier Series," Abstract and Applied Analysis, Hindawi, vol. 2020, pages 1-11, December.
    3. Pramod K Singh & Harpalsinh Chudasama, 2020. "Evaluating poverty alleviation strategies in a developing country," PLOS ONE, Public Library of Science, vol. 15(1), pages 1-23, January.
    4. Mara Willemijn van Twuijver & Lucas Olmedo & Mary O’Shaughnessy & Thia Hennessy, 2020. "Rural social enterprises in Europe: A systematic literature review," Local Economy, London South Bank University, vol. 35(2), pages 121-142, March.
    5. Abd. Rahman Razak & Adji Achmad Rinaldo Fernandes & Nur Imam Saifullah, 2023. "Moderation of village funds and mediation of agricultural sector growth on poverty in rural areas," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 26(4), pages 463-483.
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