Predicting Consumption Poverty Using Non-consumption Indicators : Experiments Using Indonesian Data
AbstractAlthough consumption expenditure data is crucial for assessing the level of peoples welfare and calculating important welfare measures such as the poverty headcount rate, collecting such data requires significant time and effort. In this study, we experiment with three approaches to predict consumption expenditure and poverty at household and aggregate level as simpler alternatives to using consumption expenditure. The idea is not to use these alternatives as a substitute for consumption expenditure data, rather to use it for the purposes of rapid monitoring and appraisal of welfare. The three approaches are i) consumption correlates model, ii) poverty probability model, and iii) the wealth index Principal Components Analysis (PCA). We test each approachs performance and found that the consumption correlates model is the best approach to predict poverty quickly and relatively accurately. We found that education level, asset ownership, and consumption pattern are the best predictors of expenditure and poverty.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Development Economics Working Papers with number 22542.
Date of creation: Jan 2006
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consumption; poverty; predictor; data; Indonesia;
Other versions of this item:
- Sudarno Sumarto & Daniel Suryadarma & Asep Suryahadi, 2007. "Predicting Consumption Poverty using Non-Consumption Indicators: Experiments using Indonesian Data," Social Indicators Research, Springer, vol. 81(3), pages 543-578, May.
- I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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