Our Expertise
This note is an update on the social impacts of the Indonesian crisis. In this note we focus exclusively on changes in real household consumption expenditures, as these reflect both actual changes in people's current living standards, and can also serve as a measurable proxy for income changes due to the crisis.
In this study we provide some preliminary evidence about the impact of the economic crisis on household living standards, measured by real consumption expenditures per capita, and the distribution of living standards across households, measured by indices of inequality. Our study has two distinguishing characteristics worth highlighting right from the start.
In this paper we use repeated cross-sectional data from Indonesia for the years 1986 to 1998 to examine two inter-related questions.
Calculations of the benefit incidence and targeting effectiveness of "safety net" programs have typically examined only the relationship between a household's current expenditures and program participation. However, in programs that respond to an economic shock or intend to mitigate household risk, it is not just the current level of expenditures that matters, but also changes in expenditures.
Vulnerability is an important aspect of households' experience of poverty. Many households, while not currently "in poverty", recognize that they are vulnerable to events that could easily push them into poverty-a bad harvest, a lost job, an unexpected expense, an illness, an economic downturn.
