Using Engel curves to measure CPI bias for Indonesia

To measure real income growth over time a price index is needed to adjust for changes in the cost of living. The Consumer Price Index (CPI) is often used for this task but studies from several countries show the CPI is a biased measure of changes in the cost of living, leading to potentially wrong estimates of the rate of growth of real income. In this paper CPI bias for Indonesia is calculated by estimating food Engel curves for households with the same level of CPI-deflated incomes at four different points in time between 1993 and 2008. The results suggest CPI bias was initially negative during the Asian Crisis but has been positive since 2000. Over the entire period, CPI bias has averaged four percent annually, equivalent to almost one-third of the measured inflation rate

Distributional impact analysis of past climate variability in rural Indonesia

In rural Indonesia, around 60 percent of workers engage in agriculture and face regular climatic shocks that may threaten their crop production, household income, and human capital investments. Little is known about households’ ability to maintain consumption in response to these shocks. This paper uses both longitudinal and repeated cross-sectional data to examine the extent to which farm profits and household consumption are reduced by delayed monsoon onset, an important determinant of rice production in Indonesia. It also investigates whether poor households are more vulnerable to delayed onset. Overall, delayed onset has minor effects on rural households’ profit and consumption. For poor households, defined as those with average per capita consumption in the lowest quintile, delayed onset the previous year is associated with a 13 percent decline in per capita consumption. Most of this decline is due to an increase in household size, however, and delayed onset two years ago is positively correlated with consumption. The findings suggest that poor households experience greater volatility but no lasting reduction in consumption following delayed monsoon onset.Rural Poverty Reduction,Small Area Estimation Poverty Mapping,Consumption,Regional Economic Development

Religious Activity Participation and Self-Rated Health Among Older Population in Indonesia

A number of studies have documented a positive and robust relationship between religious activity and health outcomes. The purpose of the study was to examine the relationship between religious activity participation and self-rated health (SRH) among older population in Indonesia. Data were obtained from 2,915 respondents 60 years and older from the Indonesian Family Life Survey 4 (2007). SRH was assessed by a single-item health measure with four options: “very healthy,” “somewhat healthy,” “somewhat unhealthy,” and “unhealthy”. Logistic regression were used to examine the relationship of the religious activity participation and SRH. Bivariate analysis revealed that religious activity participation was significantly associated with SRH. Multivariate analysis shows that among participants who participated in religious activity, the likehood of a better SRH is increased (OR = 1.422; 95% CI = 1.203 to 1.682) after controlling for sociodemographic variables, socio-economic status (SES), health behaviour and number of Non Communicable Diseases (NCDs). This findings suggest that religious activity participation has an important effect on self-rated health status. Longitudinal studies are needed to help elucidate mechanisms and the order and direction of effects

The significance of Sampling Design on Inference: An Analysis of Binary Outcome Model of Children’s Schooling Using Indonesian Large Multi-stage Sampling Data

This paper aims to exercise a rather recent trend in applied microeconometrics, namely the effect of sampling design on statistical inference, especially on binary outcome model. Many theoretical research in econometrics have shown the inappropriateness of applying i.i.dassumed statistical analysis on non-i.i.d data. These research have provided proofs showing that applying the iid-assumed analysis on a non-iid observations would result in an inflated standard errors which could make the estimated coefficients inefficient if not biased. Consequently, a policy-affecting quantitative research would give an incorrect - usually of type-1 errors - in its conclusion. Using a dataset sourced from the third cycle of the Indonesia Family Life Survey (IFLS), which sampling design involved multi-stage clustering and stratification, this paper shows discrepancies in the estimation result of probit regressions of a child attending school when the estimated standard errors are adjusted and not. The computation also shows a considerable change in the level of confidence in not-rejecting the null hypothesis of the explanatory variables. This paper provides more evidence that statistical analysis should always take into account the sampling design in collecting the data.Applied microeconometrics, survey data, IFLS, design effects, economics of education, demand for schooling

Poverty Dynamics In Indonesia: Panel Data Evidence

Despite its importance (for example in order to distinguish the nature of chronic and transient poverty), good studies on poverty dynamics in Indonesia is quite rare. One important constraint is the need of panel or longitudinal data where observations of the living conditions of the same individuals or households are made at several points in time. In developing countries, the existence of this type survey, of course, is not a norm. In Indonesia, longitudinal household survey was not present until in 1993, Rand cooperation and Demographic Institute of University of Indonesia, conducted Indonesian Family Survey (IFLS), in which around 7,600 household in 13 province in Indonesia were survey and re-surveyed in 1997. This two set of data (to our knowledge) resulted in the first dataset that was specifically designed to be a panel/longitudinal data. In this paper, we would utilize this rich set of data, to study poverty dynamics in Indonesia, by dividing poverty into transient and chronic poverty. We would investigate socioeconomic characteristics of those households that belongs to transiently-poor and chronically-poor group to see any distinctive characteristics between the two. In addition to that, we would investigate whether regional factors i.e. urban-rural location, and geographical difference (such as across province or localities) would also reveal distinctive patterns. Keywords: poverty dynamics, panel data, chronic poverty, transient povertypoverty dynamics, panel data, chronic poverty, transient poverty

Role of the Household and Community in Determining Child Health

Nutritional status at a young age is positively associated with an individual?s total human capital accumulated. Higher levels of human capital are in turn strongly correlated with an individual?s economic and social well-being. Health is one such dimension of human capital and improvements in children?s nutritional status improve an individual?s overall lifetime well-being. This paper examines the various child level, household level, and community level characteristics that determine health status among children. The paper uses data from the three waves of the Indonesian Family Life Survey to assess the gender-specific determinants of child health outcomes. I do not find any evidence for gender-differential impact of the household and community characteristics in determining child health. I find that household characteristics like parental height have a strong positive effect on determining child health. There is some evidence supporting the positive association between household income and child health. Among the community infrastructure variables ? measure of prevalence of electricity in the community and dummy for presence of paved road in the community are both positively associated with child health. The results obtained here are robust to a number of econometric concerns like measurement error in household income variable, correlation between community time-invariant unobservables and household specific unobservables, correlation between community time-invariant unobservables and community resource availability variables. Community level fixed-effects along with IV techniques used in this paper address the aforementioned methodological concerns.child health, well-being, nutrition, Indonesia

Long-Term Health Effects on the Next Generation of Ramadan Fasting During Pregnancy

Each year, many pregnant women fast from dawn to sunset during the Islamic holy month of Ramadan. Medical theory suggests that this may have negative long-term health effects on their offspring. Building upon the work of Almond and Mazumder (2008), and using Indonesian crosssectional data, I show that people who were exposed to Ramadan fasting during their mother's pregnancy have a poorer general health and are sick more often than people who were not exposed. This effect is especially pronounced among older people, who, when exposed, also report health problems more often that are indicative of coronary heart problems and type 2 diabetes. The exposed are a bit smaller in body size and weigh less. Among Muslims born during, and in the months after, Ramadan, the share of males is lower, which is most likely to be caused by death before birth. I show that these effects are unlikely to be an artifact of common health shocks, correlated to the occurrence of Ramadan, or o f fasting mainly occurring among women who, irrespective of fasting or not, would have had unhealthier children anyway.health, Ramadan, pregnancy, nutrition, Indonesia

Food Demand Analysis of Indonesian Households with Particular Attention to the Poorest

The purpose of this study is to analyze the demand responses of Indonesian households to food prices, income changes and other socioeconomic factors. The underlying assumption here is that inadequate information on household food expenditure patterns which vary across income groups and regions may have its contribution to the persistence of food insecurity. We use the Indonesian Family Life Survey data and methodologically we employ an extended form of the Quadratic Almost Ideal Demand System model which includes demographic and regional factors. Results reveal the well known pattern that food demand behavior varies significantly between urban and rural households as well as income groups. The poorest households consume relatively more staple food as well as alcohol and tobacco goods while the richest households consume relatively more meat, snack and dried food. It is shown that the poorest households’ expenditure elasticity on alcohol and tobacco is high implying that the poorest households transfer their extra resources on alcohol and tobacco goods instead of more nutritious food items. Results also show that price and expenditure elasticities have changed across time (1997-2007). Own price elasticities have increased for most food items implying that people have become more responsive to changes in prices. In contrast, the expenditure elasticity has declined for most food items (except for ‘alcohol and tobacco goods’) which would imply welfare improvement since the 1997 crisis.food demand, QUAIDS, Indonesia, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, D11, D12,