Spatial econometric analysis of the socio-economic development index of the provinces in Turkey

Differences in development between regions or provinces constitute major problems for all countries. Thus, studies, aimed at reducing the development differences among regions, are in progress around the world. Many studies have been carried out on development plans, regional development projects and investment incentives in order to eliminate developmental differences between regions in Turkey from past to present. In order to quantify the developmental differences between the provinces, it is necessary to calculate the socio-economic development indices of the provinces. For this purpose, various economic, physical and social indicators covering the years 2008 - 2015 of provinces in Turkey have been used in the study. Firstly, economic, physical and social development indices are calculated with equal weight to each indicator. Then, general development index is calculated by giving equal weight to all dimensions. The fact that socio-economic development indices of the provinces are similar in places close to each other shows that the development levels of the provinces can be affected with each other. Spatial econometrics is a subcategory of econometrics that considers the spatial interaction between units. Theoretical idea of spatial interaction comes from Tobler (1970)'s law of "Everything is related to everything else, but near things are more related than distant things". According to this, it is expected that the geographically close provinces are at similar development levels. For this reason, spatial econometric analysis method is preferred when the factors affecting the development levels of provinces are examined. In this study, different economic, physical and social indicators covering the years 2008-2015 are used in the spatial econometric model. With this study, it is investigated factors affecting development levels of provinces, whether the development levels of provinces are affected spatially each other and how the development levels of provinces are affected each other. Keywords: Socio-economic development index, Spatial econometrics, Turkey.