Rahmawita

Departemen Matematika dan Sains Data, Universitas Andalas, Padang, Indonesia

Ferra Yanuar

Departemen Matematika dan Sains Data, Universitas Andalas, Padang, Indonesia

Dodi Devianto

Departemen Matematika dan Sains Data, Universitas Andalas, Padang, Indonesia

DOI: https://doi.org/10.19184/mims.v26i1.60016

ABSTRACT 

This study is based on the increase in Gross Regional Domestic Product (GRDP) and the decrease in poverty rates in 2024. This indicates a relationship between the two variables. Previous studies have shown the influence of poverty rates on GRDP and vice versa, these relationships were generally examined using single-equation models that did not account for possible simultaneous interactions. Therefore, this study aims to analyze the relationship between poverty rates and GRDP using a simultaneous equation model with The Two Stage Least Squares (2SLS) approach to see the two-way relationship of the two variables. The results show that GRDP has a significant effect on poverty rates, while poverty rates do not have a significant effect on GRDP. These findings provide empirical evidence that the relationship between the two variables is not reciprocal but rather unidirectional, with GRDP being the only variable that significantly influences poverty rates.

Keywords: Simultaneous model, Two-Stage Least Square, poverty, economic growth.

MSC2020: 62P20