APPLICATION OF NONPARAMETRIC GEOGRAPHICALLY WEIGHTED REGRESSION METHOD ON OPEN UNEMPLOYMENT RATE DATA IN INDONESIA

Abstract

Nonparametric Geographically Weighted Regression (NGWR) model is a development of nonparametric regression with geographic weights for spatial data where parameter estimators are local to each observation location. NGWR is used to obtain the best model for the Open Unemployment Rate (OUR) data in Indonesia. Unemployment is still a significant social and economic problem in Indonesia. This study aims to obtain the NGWR model on the OUR data in Indonesia and to determine the factors that significantly affect OUR. The method used is the NGWR model with bisquare kernel function weighting and gaussian kernel function. The best model is obtained by NGWR with bisquare kernel function weighting at order 1 and knot point 1, with R2 is 83.45 percent which explains that the predictor variables affect the OUR by that number. The factors that have a significant effect on OUR are the percentage of population density, minimum wage, average years of schooling, GRDP, and the percentage of poor people.