An Examination of Methods to Estimate Poverty Line in Indonesia

Muhammad Nashihin


The first objective of this paper is to set out a new approach for estimating regional poverty lines in
Indonesia. The approach is referred as a utility-consistent poverty line (UCPL) approach. It is based
on a theory of price index or cost of living index (COLI). The second objective is to examine the
development of methods for estimating poverty lines in general and methods used to estimate regional
poverty lines in Indonesia. The survey focuses on comparing these methods with UCPL approach.
The paper finds out that the existing methods used to estimate poverty line in Indonesia are
not able to generate utility-consistent poverty lines.
Keywords: Poverty line, spatial cost of living, food energy intake, ravallion method

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