1. Estimation of cost of living in a particular city using multiple regression analysis and correction of residual assumptions through appropriate methods.
- Author
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Halim, Georgius Andrian, Agustin, Patrice, Adiwijayanto, Elbert, and Ohyver, Margaretha
- Subjects
COST of living ,MULTIPLE regression analysis ,CONSUMER price indexes ,RURAL population ,CITY dwellers ,CITIES & towns - Abstract
From year to year, the poor economic conditions and lack of employment opportunities in villages are the main push factors for the rural population moves to the urban areas. Indonesia is home to more than 260 million people and is one of the world's most rapidly urbanizing countries. Between 1980 and 2010, Indonesia's urban population grew about fourfold, from 32.8 to 118.3 million. But when the rural population move to the urban area, they did not know about the cost of living in the urban area that is so much different from the rural area. Also, many rural populations get underpaid, and their wages is not enough to cover their cost of livings. This study aims to develop a regression model that is able to predict the cost of living of an area by using the Groceries Index and Restaurant Index with good accuracy. The developed regression model fulfills the residual assumption of heteroscedasticity by using the Weighted Least Squares method, which is selected after comparison with other regression equation by measuring its residual standard error value. The estimated Cost of Living Index could then be used accordingly to help determine the cost of living in a particular city (relative to New York City) or as factor in other calculations, such as calculating the minimum wage of a particular area. [ABSTRACT FROM AUTHOR]
- Published
- 2023
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