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

Working Paper 21

December 2014

Authors : Sudarno Sumarto and Indunil De Silva

The aim of this study was twofold. First, although a number of empirical studies exist on income poverty in Indonesia, very few have examined multidimensional household welfare deprivations. We attempted to fill this gap by using 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 uni dimensional 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 programmes 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 under score the need to use both monetary and multidimensional poverty indices 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.

The TNP2K Working Paper Series disseminates the findings of work in progress to encourage discussion and exchange of ideas on poverty, social protection, and development issues.

Support for this publication has been provided by the Australian Government through the Poverty Reduction Support Facility (PRSF).

The findings, interpretations, and conclusions herein are those of the author(s) and do not necessarily reflect the views of the Government of Indonesia or the Government of Australia.

You are free to copy, distribute, and transmit this work for noncommercial purposes.

Suggested citation: Sumarto, Sudarno and Indunil De Silva. 2014. ‘Beyond the Headcount: Examining the Dynamics and Patterns of Multidimensional Poverty in Indonesia’. TNP2K Working Paper 21-2014. Jakarta, Indonesia: Tim Nasional Percepatan Penanggulangan Kemiskinan (TNP2K).

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