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A Reassessment of Inequality and Its Role in Poverty Reduction in Indonesia

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Author Info
Daniel Suryadarma (SMERU Reasearch Centre)
Rima Prama Artha (SMERU Reasearch Centre)
Asep Suryahadi (SMERU Reasearch Centre)
Sudarno Sumarto (SMERU Reasearch Centre)

Additional information is available for the following registered author(s):

Abstract

This study provides an overview of inequality in Indonesia for the period of 1984 to 2002 using several widely used measurements of inequality. Firstly, unlike previous studies, our paper uses real consumption expenditure that takes into account the high regional price disparity across regions in Indonesia. Secondly, we found that, although during the crisis all measures indicate a decrease in inequality, it actually increased for those below the poverty line. Finally, this study also provides an estimation of ‘distribution corrected’ growth elasticity of poverty for Indonesia. This proves to be an important explanation for the fact that the poverty rate decreased very rapidly between 1999 and 2002: because inequality during the peak of the economic crisis in 1999 was at its lowest level in 15 years.

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File URL: http://www.eaber.org/intranet/documents/41/525/SMERU_Suryadarma_05.pdf
File Format: application/pdf
File Function: First Version, 2005
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Publisher Info
Paper provided by East Asian Bureau of Economic Research in its series Development Economics Working Papers with number 525.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 31 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:eab:develo:525

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Related research
Keywords: inequality; Indonesia; real consumption expenditure; disparity; poverty; economic crisis; Indonesia;

Other versions of this item:

Find related papers by JEL classification:
P46 - Economic Systems - - Other Economic Systems - - - Household Behavior
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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    Other versions:
  3. Anna Wetterberg & Sudarno Sumarto & Lant Pritchett, 1999. "A National Snapshot of the Social Impact of Indonesia's Crisis," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 35(3), pages 145-152, December. [Downloadable!] (restricted)
  4. Richard Blundell & Ian Preston, 1998. "Consumption Inequality And Income Uncertainty," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 603-640, May. [Downloadable!] (restricted)
    Other versions:
  5. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December. [Downloadable!] (restricted)
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  6. James R. Hines Jr. & Hilary W. Hoynes & Alan B. Krueger, 2001. "Another Look at Whether a Rising Tide Lifts All Boats," NBER Working Papers 8412, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Wan, Guanghua, 2002. "Regression-based Inequality Decomposition: Pitfalls and a Solution Procedure," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  8. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank. [Downloadable!]
    Other versions:
  9. Philippe Aghion & Eve Caroli & Cecilia Garcia-Penalosa, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December. [Downloadable!] (restricted)
    Other versions:
  10. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September. [Downloadable!] (restricted)
    Other versions:
  11. Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Stephen P. Jenkins & Philippe VanKerm, 2003. "Trends in Income Inequality, Pro-Poor Income Growth and Income Mobility," Discussion Papers of DIW Berlin 377, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  13. Pradhan, Menno, et al, 2001. "Eating Like Which "Joneses?" An Iterative Solution to the Choice of a Poverty Line "Reference Group."," Review of Income and Wealth, Blackwell Publishing, vol. 47(4), pages 473-87, December. [Downloadable!] (restricted)
  14. Francois Bourguignon, 2004. "The Poverty-growth-inequality triangle," Indian Council for Research on International Economic Relations, New Delhi Working Papers 125, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
  15. Takahiro Akita, 2002. "Regional Income Inequality In Indonesia And The Initial Impact Of The Economic Crisis," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 38(2), pages 201-222, August. [Downloadable!] (restricted)
  16. Asep Suryahadi & Sudarno Sumarto & Lant Pritchett, 2003. "The Evolution of Poverty during the Crisis in Indonesia," Development Economics Working Papers 115, East Asian Bureau of Economic Research. [Downloadable!]
  17. repec:fth:michin:446 is not listed on IDEAS
  18. repec:fth:prinin:454 is not listed on IDEAS
  19. Martin Feldstein, 1998. "Income Inequality and Poverty," NBER Working Papers 6770, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. James Levinsohn & Steven Berry & Jed Friedman, 1999. "Impacts of the Indonesian Economic Crisis: Price Changes and the Poor," NBER Working Papers 7194, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  21. Emmanuel Skoufias & Asep Suryahadi, 2000. "Changes in Household Welfare, Poverty and Inequality During the Crisis," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 36(2), pages 97-114, August. [Downloadable!] (restricted)
  22. Benabou, R., 1996. "Inequality and Growth," Working Papers 96-22, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
    Other versions:
  23. Stéphane Mussard & Françoise Seyte & Michel Terraza, 2003. "Decomposition of Gini and the generalized entropy inequality measures," Economics Bulletin, Economics Bulletin, vol. 4(7), pages 1-6. [Downloadable!]
  24. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287. [Downloadable!] (restricted)
  25. Louis Kaplow, 2002. "Why Measure Inequality?," NBER Working Papers 9342, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  26. Asep Suryahadi & Wenefrida Widyanti & Sudarno Sumarto, 2003. "Short-term poverty dynamics in rural Indonesia during the economic crisis," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(2), pages 133-144. [Downloadable!]
  27. Asep Suryahadi & Sudarno Sumarto & Lant Pritchett, 2003. "Evolution of Poverty During the Crisis in Indonesia," Asian Economic Journal, East Asian Economic Association, vol. 17(3), pages 221-241, 09. [Downloadable!] (restricted)
  28. Orazio Attanasio & Erich Battistin & Hidehiko Ichimura, 2004. "What Really Happened to Consumption Inequality in the US?," NBER Working Papers 10338, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  29. Asep Suryahadi & Sudarno Sumarto, 2003. "Poverty and Vulnerability in Indonesia Before and After the Economic Crisis," Asian Economic Journal, East Asian Economic Association, vol. 17(1), pages 45-64, 03. [Downloadable!] (restricted)
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