Spatial econometric analysis of automobile and motorcycle traffic on Indonesian national roads and its socio-economic determinants: Is it local or beyond city boundaries?

The purpose of this paper is to verify the justification provided for a centralized national road policyin Indonesia, namely, that trips on national roads are typically inter-urban, by measuring the spatialdimensions of automobile and motorcycle trips on national roads in Indonesia. The study finds thatmotorcycle trips are characteristically local; by contrast, automobile trips extend beyond city boundaries,although to a limited extent. The results suggest the decentralization of transportation policies for thedevelopment and maintenance of national roads by granting autonomy to local governments when nofiscal externality exists. The results also indicate that road capacity, gasoline prices, income, populationand worker density, city size, and the number of public buses are strong predictors of vehicle kilometerstraveled. Keywords: Road transport, Indonesian traffic, Spatial autocorrelation, JEL classification: R41, R49, R53