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Measurements of poverty in Indonesia - 1996, 1999, and beyond

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  • Pradhan, Menno
  • Suryahadi, Asep
  • Sumarto, Sudarno
  • Pritchett, Lant

Abstract

Indonesia's economic crisis has caused a consumption expenditures deterioration in the welfare of Indonesians. Focusing on only one dimension of individual, and family welfare - consumption expenditures - the authors analyze two issues associated with the measurement of poverty. The first issue is how to produce regionally consistent poverty lines - that is, how to define a level of spending for each region that produces the same material standard of living. Without comparable data on prices, there is a problem of circularity. Choosing the reference population is important for defining the price level by which to deflate money expenditures to reach the same welfare level, but one needs to know the price level to define the reference population as a group with the same real expenditures. To address the problem of circularity, the authors use an iterative approach to defining poverty, one that produces consistent results across regions. They then use those poverty lines to examine the common"poverty profiles"(by location, sector, and so on). The second issueis more conceptual: how to expand the narrow measure of poverty, based on spending for consumption, with extensions that expand how welfare is measured, and allow more consistent comparisons of different individuals'welfare levels.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2438.

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Date of creation: 30 Sep 2000
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Handle: RePEc:wbk:wbrwps:2438

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Related research

Keywords: Environmental Economics&Policies; Health Systems Development&Reform; Poverty Reduction Strategies; Health Economics&Finance; Public Health Promotion; Poverty Reduction Strategies; Poverty Lines; Poverty Assessment; Environmental Economics&Policies; Achieving Shared Growth;

References

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  1. Ravallion, Martin & Bidani, Benu, 1994. "How Robust Is a Poverty Profile?," World Bank Economic Review, World Bank Group, vol. 8(1), pages 75-102, January.
  2. Pritchett, Lant & Suryahadi, Asep & Sumarto, Sudarno, 2000. "Quantifying vulnerability to poverty - a proposed measure, applied to Indonesia," Policy Research Working Paper Series 2437, The World Bank.
  3. Emmanuel Skoufias & Asep Suryahadi, 2000. "Changes in Household Welfare, Poverty and Inequality During the Crisis," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 36(2), pages 97-114.
  4. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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Cited by:
  1. Daniel Suryadarma & Rima Prama Artha & Asep Suryahadi & Sudarno Sumarto, 2005. "A Reassessment of Inequality and Its Role in Poverty Reduction in Indonesia," Development Economics Working Papers 22543, East Asian Bureau of Economic Research.
  2. Ravallion, Martin & Lokshin, Michael, 2005. "Lasting local impacts of an economywide crisis," Policy Research Working Paper Series 3503, The World Bank.
  3. Wetterberg, Anna, 2007. "Crisis, Connections, and Class: How Social Ties Affect Household Welfare," World Development, Elsevier, vol. 35(4), pages 585-606, April.

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