The Extent of Land Use Externalities in the Fringe of Jakarta Metropolitan: An Application of Spatial Panel Dynamic Land Value Model
In a fast growing region, conversion of agricultural lands which are surrounded by some new development sites will occur sooner than expected. This phenomenon has been experienced by many regions in Indonesia, especially the fringe of Jakarta (BoDeTaBek). Being Indonesia’s capital city, rapid conversion of land in this area is an unavoidable process. The land conversion expands spatially into the fringe regions, which were initially dominated by agricultural land or conservation sites. Without proper control or growth management, this activity will invite greater costs than benefits. The current land use is the use which maximizes its value. In order to maintain land for agricultural activity or conservation, some efforts are needed to keep the land value of this activity as high as possible. In this case, the knowledge regarding the functional relationship between land value and its driving forces is necessary. In a fast growing region, development externalities are the assumed dominant driving force. Land value is the product of the past decision of its use leading to its value. It is also affected by the local characteristics and the observed surrounded land use (externalities) from the previous period. The effect of each factor on land value has dynamic and spatial virtues; an empirical spatial dynamic land value model will be more useful to capture them. The model will be useful to test and to estimate the extent of land use externalities on land value in the short run as well as in the long run. It serves as a basis to formulate an effective urban growth management’s policy. This study will apply the model to the case of land value in the fringe of Jakarta Metropolitan. The model will be used further to predict the effect of externalities on land value, in the form of prediction map. For the case of Jakarta’s fringe, there is some evidence about the significance of neighborhood urban activity – negative externalities, the previous land value and local accessibility on land value. The effects are accumulated dynamically over years, but they will fully affect the land value after six years.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1132561Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF Downloads 540
 Caruso, G., Peeters, D., Cavailhès, J. and Rounsevell, M. Spatial configurations in a periurban city. A cellular automata-based microeconomic model. Regional Science and Urban Economics, 37, 5, 2007, 542-567.
 Irwin, E. G. and Bockstael, N. E. Interacting agents, spatial externalities and the evolution of residential land use patterns. J Econ Geogr, 2, 1, January 1, 2002 2002, 31-54.
 Fitriani, R. and Harris, M. The Extent of Sprawl in the Fringe of Jakarta Metropolitan Area from the Perspective of Externalities. Australian Agriculture and Resource Economic Society 2011.
 Fitriani, R. and Sumarminingsih, E. Spatial Extent Of Land Use Externalities In The Jakarta Fringe: Spatial Econometric Analysis. Review of Urban & Regional Development Studies, 27, 3, 2015, 230-242.
 Douglass, M. Mega-urban Regions and World City Formation: Globalisation, the Economic Crisis and Urban Policy Issues in Pacific Asia. Urban Studies, 37, 12, November 1, 2000 2000, 2315-2335.
 Irwin, E. G. and Bockstael, N. E. Land use externalities, open space preservation, and urban sprawl. Regional Science and Urban Economics, 34, 6, 2004, 705-725.
 York, A. M. and Munroe, D. K. Urban encroachment, forest regrowth and land-use institutions: Does zoning matter? Land Use Policy, 27, 2, 2010, 471-479.
 Fitriani, R. and Harris, M. The Effect of Policies to Reduce Sprawl in the Fringe of Jakarta Metropolitan Area from the Persepective of Externalities. In Proceedings of the 2nd Conggress of the East Asian Association of Environmental and Resource Economics (Faculty of Economics and Business University of Padjajaran Bandung 2 – 4 February 2012, 2012), (insert City of Publication) (insert 2012 of Publication).
 Alonso, W. Location and land use: toward a general theory of land rent. Harvard University Press, Cambridge, 1964.
 Fitriani, R. Land Use Externalities and Urban Sprawl in Jakarta. University of Sydney, New South Wales Australia, 2011.
 Anas, A. and Kim, I. General Equilibrium Models of Polycentric Urban Land Use with Endogenous Congestion and Job Agglomeration. Journal of Urban Economics, 40, 2, 1996, 232-256.
 Capozza, D. R. and Helsley, R. W. The stochastic city. Journal of Urban Economics, 28, 2, 1990, 187-203.
 Anas, A. On the birth and growth of cities: Laissez-faire and planning compared. Regional Science and Urban Economics, 22, 2, 1992, 243-258.
 Hardie, I. W., Narayan, T. A. and Gardner, B. L. The Joint Influence of Agricultural and Nonfarm Factors on Real Estate Values: An Application to the Mid-Atlantic Region. American Journal of Agricultural Economics, 83, 1, 2001, 120-132.
 Isakson, H. R. and Ecker, M. D. An Analysis of the Influence of Location in the Market for Undeveloped Urban Fringe Land. Land Economics, 77, 1, January 1, 2001 2001, 30-41.
 Cavailhes, J. and Wavresky, P. Urban influences on periurban farmland prices. European Review of Agricultural Economics, 30, 3, September 1, 2003 2003, 333-357.
 Fitriani, R. and Sumarminingsih, E. Spatial Extent of Land Use Externalities in the Jakarta Fringe: Spatial Econometric Analysis. Review of Urban and Regional Development Studies, 27, 3, 2015, 230-242.
 Fitriani, R. and Sumarminingsih, E. The Dynamic of Spatial Extent of Land Use in the Fringe of Jakarta Metropolitan: A Semivariogram Analysis. APCBEE Procedia, 10, 2014, 198-202.
 Yu, J., de Jong, R. and Lee, L.-f. Quasi-maximum likelihood estimators for spatial dynamic panel data with fixed effects when both n and T are large. Journal of Econometrics, 146, 1, 2008, 118-134.
 Elhorst, J. P. Dynamic panels with endogenous interaction effects when T is small. Regional Science and Urban Economics, 40, 5, 2010, 272-282.
 Elhorst, J. P. Spatial Econometrics: From Cross-Sectional Data to Spatial Panels. Springer Briefs in Regional Science, Dordrecht, 2014.
 Lee, L.-f. and Yu, J. QML Estimation of Spatial Dynamic Panel Data Models with Time Varying Spatial Weights Matrices. Spatial Economic Analysis, 7, 1, 2015/03/20 2012, 31-74.
 Fitriani, R., Sumarminingsih, E. and Astutik, S. The dynamic and indirect spatial effects of neighborhood conditions on land value, spatial panel dynamic econometrics model. AIP Conference Proceedings, 1842, 1, 2017, 030030.
 Fingleton, B. Forecasting with dynamic spatial panel data: practical implementation methods. Economics and Business Letters, 3, 4, 2014, 194-207.
 Fujita, M. Urban economic theory: land use and city size / Masahisa Fujita. Cambridge University Press, Cambridge (Cambridgeshire); New York, 1989.
 Evans, A. W., Paul, C. and Edwin, S. M. Chapter 42 The land market and government intervention. Elsevier, City, 1999.
 Wu, J. and Cho, S.-H. The effect of local land use regulations on urban development in the Western United States. Regional Science and Urban Economics, 37, 1, 2007, 69-86.
 Brueckner, J. K. Growth controls and land values in an open city. (Land-Use Controls). Land Economics, 66, 3, 1990, 237-249.