Analyzing ehe Impact of Expenditure on Health and Education, Gross Regional Domestic Product, And Poverty on Human Development Index in the Special Region of Yogyakarta

Abstract

Human development has become a central focus in assessing the progress of regional development, where education, health, economic capacity, and poverty alleviation are crucial determinants of human welfare. This study examines the impact of government expenditure on education and health, gross regional domestic product (GRDP), and poverty rate on the Human Development Index (HDI) in the Special Region of Yogyakarta from 2017 to 2024. The analysis is motivated by persistent disparities in HDI levels among districts within the province, despite overall progress. Using panel data comprising five districts and municipalities, this research applies econometric estimation through Common Effect, Fixed Effect, and Random Effect Models. The Hausman and Chow tests indicate that the Fixed Effect Model (FEM) is the most appropriate estimator. The findings reveal that government expenditure on health has a significant and positive effect on HDI, suggesting that greater investment in healthcare contributes to a higher quality of life. Surprisingly, government expenditure on education shows a significant but negative effect on HDI, implying inefficiencies or delayed outcomes in the education sector. GRDP per capita exerts a strong positive influence on HDI, confirming that regional economic growth substantially enhances human development. Conversely, the poverty rate has a significant negative impact on HDI, indicating that higher poverty levels directly hinder access to health, education, and decent living standards. Overall, the model demonstrates high explanatory power (R2 = 0.9976), showing that nearly all variations in HDI are explained by the selected independent variables. These results highlight the importance of optimizing public spending effectiveness, fostering inclusive economic growth, and reinforcing poverty reduction programs as strategic approaches to improving human development outcomes in Yogyakarta.