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Beyond the Headcount: Examining the Dynamics and Patterns of Multidimensional Poverty in Indonesia.

Sumarto, Sudarno and de Silva, Indunil (2014): Beyond the Headcount: Examining the Dynamics and Patterns of Multidimensional Poverty in Indonesia. Published in: TNP2K Working Paper No. 21 (11. December 2014)

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Abstract

The aim of this study was twofold. First, despite the vast amount of empirical studies on income poverty in Indonesia, very few studies have examined multidimensional household welfare deprivations. We attempted to fill this gap by utilizing for the first time the annually conducted National Socioeconomic Survey by Statistics Indonesia (BPS), and the Alkire and Foster (2007; 2011) methodology to investigate the degree and dynamics of multidimensional household welfare deprivations in Indonesia for the 2004 and 2013 time periods. Second, we explore whether there are differing patterns of change for consumption poverty and multidimensional poverty at both the household and regional level. We investigate the magnitude of overlap between consumption and multidimensional poverty, and explore whether the multidimensionally deprived households are necessarily income poor or not and vice versa. In particular we scrutinize whether the question of who is poor has many different answers.

This paper is innovative in that it changes the focus from the conventional unidimensional perspective of poverty, centered on income or expenditure to a much broader multidimensional approach. Our results revealed the overlap between consumption poverty and multidimensional poverty to be extremely weak. Our findings broaden the targeting space for poverty reduction, suggesting that poverty reduction programs should provide different kinds of assistance to the poor in different dimensions of poverty. Results clearly demonstrate the question of who is poor to have many different answers. So overall, the findings from the study underscore the need to use both monetary and multidimensional poverty indices as complements to understand the extent, diversity and dynamics of household welfare in Indonesia. Thus placing policy analytics on fundamentally important capability deprivations, rather than only on a convenient proxy such as income or consumption, will not only help to better comprehend poverty and deprivation – but also to combat them.

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