Examining Spatial Effects of Regional Income Convergence in Sumatra Island

Spatial income disparities have become a central discussion in regional development. This study aims at addressing this issue by examining spatial effects of regional income convergence in Sumatra Island. We also take into account the possible role of the tsunami disaster of 2004 in shaping growth trajectories among provinces in Sumatra. Our results do suggest a persistence income convergence in the island regardless of the onset of the tsunami. The spatial effects indicate a nontrivial spillover effect of the Aceh’s economy on the other provinces only during the pre-disaster period