00074918.2014.938406
Bulletin of Indonesian Economic Studies
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Official Poverty Measurement in Indonesia since
1984: A Methodological Review
Jan Priebe
To cite this article: Jan Priebe (2014) Official Poverty Measurement in Indonesia since 1984:
A Methodological Review, Bulletin of Indonesian Economic Studies, 50:2, 185-205, DOI:
10.1080/00074918.2014.938406
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Date: 17 January 2016, At: 23:27
Bulletin of Indonesian Economic Studies, Vol. 50, No. 2, 2014: 185–205
OFFICIAL POVERTY MEASUREMENT IN INDONESIA SINCE
1984: A METHODOLOGICAL REVIEW
Jan Priebe*
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University of Göttingen; TNP2K, Jakarta
This article describes how the measurement of the oficial Indonesian poverty igures has evolved since 1984, when Badan Pusat Statistik (BPS), Indonesia’s central
statistics agency, published its irst poverty report. Since then, BPS has on several
occasions revised the underlying methodology for how it calculates poverty. These
changes have, in general, improved the way that poverty in Indonesia is measured, but they make it dificult to compare poverty igures over time. In fact, only
poverty estimates (at the national and provincial level) since 2007 are based on the
same methodological approach. This article presents the irst detailed description
of oficial poverty measurement in Indonesia since Booth’s (1993) study, in English,
and Sutanto and Avenzora’s (1999) study, in Indonesian. It constitutes a unique repository for anybody who wants to understand the technical details of oficial poverty measurement in Indonesia.
Keywords: poverty measurement, poverty line, prices, methodology, Susenas
JEL classiication: I31, I32
INTRODUCTION
Oficial poverty statistics in Indonesia are calculated by Badan Pusat Statistik
(BPS), the central statistics agency. Since the mid-1980s, policymakers and academics have used BPS poverty statistics to guide the allocation of public funds and to
derive policy recommendations. Yet despite the importance of these statistics for
policy, little documentation exists on how BPS derives its poverty igures. Although
BPS regularly publishes the reports Data dan informasi kemiskinan (Poverty data and
information) and Analisis dan penghitungan tingkat kemiskinan (Analysis and calculation of the poverty rate), the technical sections in these reports are very short. The
* TNP2K = Tim Nasional Percepatan Penanggulangan Kemiskinan (National Team for
the Acceleration of Poverty Reduction), Ofice of the Vice-President. I would like to thank
Anne Booth, Isis Gaddis, Fiona Howell, Stephan Klasen, Riyana Miranti, Suahasil Nazara, Ririn Purnamasari, Elan Satriawan, Sudarno Sumarto, Matthew Wai-Poi, and all three
anonymous referees for valuable input and comments, and Mercoledi Nikman Nasiir, Wisnu Harto Adi Wijoya, and Novat Pugo Sambodo for their outstanding research assistance.
Special thanks goes to BPS, and in particular Ahmad Avenzora, for providing me with
clariications on the way that it has calculated oficial poverty rates. The views expressed
in this article are mine alone and do not represent the views of TNP2K.
ISSN 0007-4918 print/ISSN 1472-7234 online/14/000185-21
http://dx.doi.org/10.1080/00074918.2014.938406
© 2014 Indonesia Project ANU
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186
Jan Priebe
last detailed description in English on BPS poverty measurement is that of Booth
(1993), while the last in Indonesian is that of Sutanto and Avenzora (1999).1 These
publications are rich sources of information on poverty measurement in Indonesia,
but they are now dated and do not cover every important technical area.
The absence since 1993 of any detailed documentation in English on oficial
poverty measurement in Indonesia is unsatisfactory. Until about 1993, the World
Bank regularly provided a detailed source of information on poverty measurement. Before 1984, the year of BPS’s irst oficial poverty report, the World Bank
and its staff produced its own poverty estimates for the country in order to assess
the extent and the trend of poverty in Indonesia (Booth 1993). It stopped producing such estimates after 1984, the year of BPS’s irst oficial poverty report, to
avoid conlicts with the oficial BPS igures.2 Yet World Bank staff continued to
provide important technical input into BPS’s methodology for calculating oficial
poverty rates. In particular, Martin Ravallion, who worked on poverty measurement in Indonesia in the late 1980s and early 1990s, published a series of important papers and articles (Ravallion and Huppi 1991; Ravallion and Van der Walle
1991a, 1991b; Bidani and Ravallion 1993; World Bank 1993). With the World Bank
redirecting its activities in Indonesia, the publication of technical articles and
reports related to oficial BPS poverty measurement stopped, and the academic
literature has yet to ill the knowledge gap. While most studies have relied on
the oficial BPS poverty statistics, a few have tried to come up with alternative
poverty estimates (Asra 1989; Pradhan et al. 2000, 2001; Levinsohn, Berry, and
Friedman 2003; Nashihin 2007; Miranti 2010; Miranti et al. 2013). The oficial BPS
methodology, however, remains largely undiscussed in these studies.
This article’s principal objective, then, is to ill an important gap in the literature by explaining in detail how poverty is oficially measured in Indonesia and
how BPS‘s methodological approach of measuring poverty has evolved. It constitutes a unique repository for anybody who wants to understand the technical
details of oficial poverty measurement in Indonesia.
POVERTY MEASUREMENT UNTIL 1984
Poverty measurement in Indonesia has a long history—in 1928 the predecessor
of BPS published its irst study of household budgets in urban areas (CKS 1928).
Middle-income groups were overrepresented in that study.3 Later studies, such as
the Investigation into Living Standards of Coolie Workers in Batavia, from 1937,
and the so-called Coolie Budget Commission study of living standards of farmers
1. Other BPS documents that address poverty measurement in Indonesia include those of
Ritonga and Avenzora (2002), BPS (2002, 2010), and Maksum (2004). However, these documents lack important information and therefore do not help in obtaining a more thorough
overview of poverty measurement in Indonesia.
2. Confusion still arises on occasion about the World Bank’s poverty igures ($1.00 or $1.25
per day [purchasing power parity]). While these igures make sense only in an international comparison, they are often inappropriately used in policy forums and the media by
those interpreting them as national poverty rates and trends. See Sumner and Edward’s
(2014) study, in this issue.
3. The survey was based on 348 households of public servants in urban areas. The methodology required them to record expenditure over several weeks, which caused the sample to
be biased to middle-income households able to read, write, and calculate.
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Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
187
and plantation workers during 1939–40, broadened the scope of measurement of
welfare of the population in Indonesia (Booth 1993).
After independence the irst unoficial poverty estimates appeared between
1975 and 1986. According to Booth (1993), the main approaches at that time
were those of Sajogyo (1975; Sajogyo and Wiradi 1985), Esmara (1986), and the
World Bank and its staff (1980; Chernichovsky and Meesok 1984).4 The ‘Sajogyo
approach’ classiied persons living in rural areas as very poor if their annual expenditures were below 240 kilograms of milled rice (in purchasing power) and poor if
their annual expenditures were between 240 and 320 kilograms. The urban poverty line was derived by applying a 50% mark-up on the rural poverty line. At
that time, the World Bank published two very different approaches to measuring
poverty: its report Employment and Income Distribution in Indonesia (1980) deined
the poor as those with monthly expenditure below Rp 3,000 per capita,5 while
Chernichovsky and Meesok (1984) deined the poor as those in the bottom 40% of
the per capita expenditure distribution.6
At the time, the most inluential proposal on how to measure poverty in Indonesia came from Esmara (1986). Using data from the 1970, 1976, 1978, and 1980
rounds of the National Socio-economic Survey (Susenas), the ‘Esmara approach’
formulated a basic-needs food and non-food package that could differ in urban
and rural areas. According to Esmara, the underlying basket of food and non-food
items should be re-evaluated in each new Susenas round, leading to a new underlying basket or what Esmara called a ‘dynamic poverty line’.
OFFICIAL POVERTY MEASUREMENT
In 1984 BPS published its irst oficial poverty igures for Indonesia, in Jumlah
dan persentase penduduk miskin di Indonesia 1976–1981 (The number and percentage
of poor in Indonesia 1976–1981), using data from the 1976, 1978, 1980, and 1981
rounds of Susenas (BPS 1984). Since then, BPS has regularly updated its poverty
igures and adjusted the way it calculates poverty. In this section, I describe how
poverty measurement has evolved since 1984. I distinguish between the principal data source underlying poverty measurement (Susenas) and more technical
aspects, such as the composition of the food and non-food baskets and the treatment of food consumed outside of the home. Tables 1 and 2 depict the corresponding poverty estimates and poverty lines.
4. Recent instances of the BPS publication Analisis dan penghitungan tingkat kemiskinan
(Analysis and calculation of the poverty rate) list further unoficial poverty lines and poverty estimates that emerged between 1975 and 1985.
5. A province-speciic rural and urban spatial price delator was applied to the consumption aggregate whereby the reference category was Jakarta. Indonesia deines districts as
municipalities (kota) or predominantly rural areas (kabupaten). Each district can then be
divided into urban precincts (kelurahan) and rural villages (desa). BPS’s deinition of rural
and urban areas in its poverty measurement uses the desa and kelurahan classiications.
6. In addition, the World Bank (1990) draws on an internal analysis by V. V. Rao from 1983,
in which poverty estimates are based on valuing the price of 16 kilograms of rice (step one),
multiplying the obtained value by 1.25 to allow for other food expenditures (step two),
and then dividing this igure by the share of food expenditures in total expenditures of the
expenditure group whose total food expenditures were closest to those in step two. Rao’s
estimates were calculated separately for each region (provinces and rural and urban areas).
TABLE 1 Oficial Poverty Statistics, 1976–2014
Poverty rate
(%)
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Urban Rural
Number of poor
individuals
(million)
Total Urban Rural
Total
Remarks
1976
1978
1980
1981
1984
1987
1990
1993
38.8
30.8
29.0
28.1
23.1
20.1
16.8
13.5
40.4
33.4
28.4
26.5
21.2
16.1
14.3
13.8
40.1
33.3
28.6
26.9
21.6
17.4
15.1
13.7
10.0
8.3
9.5
9.3
9.3
9.7
9.4
8.7
44.2
38.9
32.8
31.3
25.7
20.3
17.8
17.2
54.2
47.2
42.3
40.6
35.0
30.0
27.2
25.9
1996
1996
1996
9.7
19.9
19.8
12.3
13.7
13.4
11.3
17.7
17.5
7.2
9.6
9.4
15.3
24.9
24.6
22.5
34.5 1998 method; SA
34.0 1998 method; RA & statistical yearbooks
1998
1998
21.9
14.4
25.7
20.1
24.2
17.9
17.6
11.6
31.9
24.9
49.5
36.5 1996 method; SA
1999
1999
1999
19.4
8.9
15.1
26.0
13.6
20.2
23.4
11.7
18.2
15.6
7.3
12.4
32.3
16.9
25.1
48.0
24.2 1996 method; SA
37.5 Susenas ‘Mini’; SA
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011M
2011S
2012M
2012S
2013M
2013M
14.6
9.8
14.5
13.6
12.1
11.4
13.5
12.5
11.4
10.7
9.9
9.2
9.1
8.8
8.6
8.4
8.4
22.4
24.8
21.1
20.2
20.1
19.5
21.8
20.4
18.6
17.4
16.6
15.7
15.6
15.1
14.7
14.3
14.3
19.1
18.4
18.2
17.4
16.7
16.0
17.8
16.6
15.2
14.2
13.3
12.5
12.4
12.0
11.7
11.4
11.4
12.3
8.6
13.3
12.2
11.4
12.4
14.5
13.6
12.6
11.9
11.1
11.1
11.0
10.6
10.5
10.3
10.4
26.4
29.3
25.1
25.1
24.8
22.7
24.8
23.6
22.0
20.6
19.9
19.0
18.9
18.5
18.1
17.7
17.8
38.7
37.9
38.4
37.3
36.1
35.1
39.3
37.2
34.5
32.5
31.0
30.0
29.9
29.1
28.6
28.1
28.2
2013S
2013S
8.5
8.6
14.4
14.4
11.5
11.5
10.6
10.7
17.9
17.9
2014M
8.3
14.2
11.3
10.5
17.8
28.6
28.6 BPS revisions in 2014, based on newly available
population projections related to the Population
Census 2010
28.3
*
**
***
BPS revisions in 2014, based on newly available
population projections related to the Population
Census 2010
Source: Author’s compilations based on data from various BPS publications.
Note: Shaded rows represent alternative scenarios or revisions. SA = Sutanto and Avenzora (1999).
RA = Ritonga and Avenzora (2002). * Predicted values for Aceh Darussalam and Moluku. ** Predicted
values for Aceh Darussalam. *** Predicted values for Aceh Darussalam, Moluku, Moluku Utara, and
Papua. M March round. S September round.
TABLE 2 Oficial Urban and Rural Poverty Lines, 1976–2014
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Urban
Food
poverty line
(Rp/month)
Non-food
share
(%)
1976
1978
1980
1981
1984
1987
1990
1993
1996
1998
3,901
4,284
5,881
8,288
11,527
15.9
16.0
16.2
18.0
19.1
17,520
23,303
29,681
71,058
1999
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011M
2011S
2012M
2012S
2013M
2013S
2014M
Rural
Total
Food
poverty line poverty line
(Rp/month) (Rp/month)
Non-food
share
(%)
Total
poverty line
(Rp/month)
2,685
2,805
4,179
5,517
7,239
6.1
6.3
6.5
6.5
7.0
15.1
16.5
22.4
26.7
4,522
4,969
6,831
9,777
13,731
17,381
20,614
27,905
38,246
96,959
12,617
15,576
23,197
56,745
5.1
14.6
15.4
22.0
2,849
2,981
4,449
5,877
7,746
10,294
13,295
18,244
27,413
72,780
70,959
64,396
23.2
28.0
92,409
89,845
59,822
52,319
19.5
24.6
74,272
69,420
70,364
76,798
93,351
23.2
23.2
28.5
59,316
64,740
73,030
19.5
19.5
24.3
103,992
126,163
132,258
143,897
155,909
163,077
177,342
184,919
187,194
194,207
202,137
215,750
223,091
31.0
27.6
29.6
29.8
29.8
30.0
29.9
29.9
30.0
30.0
30.1
30.1
30.0
91,632
100,011
130,499
138,803
143,455
150,799
174,290
187,942
204,896
222,123
232,989
253,016
263,594
267,408
277,382
289,041
308,826
318,514
84,014
102,907
116,265
127,207
139,331
148,939
165,211
172,723
177,521
185,967
196,215
213,250
221,379
28.4
21.2
20.8
21.4
22.5
22.6
22.6
22.6
22.6
22.7
22.5
22.7
22.6
73,648
80,382
96,512
105,888
108,725
117,259
130,584
146,837
161,831
179,834
192,354
213,395
223,181
229,226
240,441
253,273
275,779
286,097
Source: Author’s compilations based on data from various BPS publications.
Note: Shaded row represents Susenas ‘Mini’. Poverty lines are in current rupiah per capita. Reported
poverty lines for 1976–87 were used to derive oficial poverty estimates. Later poverty estimates are
based on rural or urban provincial poverty lines, which are not reported in this article. Non-food
share = non-food poverty line divided by the total poverty line. M March round. S September round.
The value of the food poverty line for 1987 was tabulated in BPS (1992). Unfortunately, this document
could not be located by BPS. For 2003 and 2004 the values of the food and non-food poverty line were
not available from BPS.
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190
Jan Priebe
Susenas: An Overview
All oficial poverty estimates in Indonesia have used data from Susenas. The frequency, timing, and questionnaire design of the survey itself has changed much
since its irst round, in 1963.7 Susenas consists of a core survey and a number of
modules; the core is administered in each Susenas round and to every selected
household. In contrast, the module questions change from round to round and in
some Susenas rounds are administered to only a subsample of households. Before
1992 the core comprised only ive questions (four demographic and one educational). Since 1992 BPS has used a completely revised core questionnaire that,
among other information, captures consumption expenditure information in each
Susenas round.8 Yet not every Susenas module includes questions on consumption expenditure, so despite the availability of annual Susenas data since 1992 BPS
has not been able to publish poverty igures for every round of the survey.9
To measure poverty, BPS constructs a rupiah-valued welfare aggregate—largely
by summing the rupiah values of several expenditure items and categories—and
then benchmarks it against the relevant poverty line. To obtain consumption (or
consumption-related) expenditure for each item and category in the aggregate,
BPS uses a recall period in which the incurred expenditures relect as closely as
possible the actual consumption in a suitable reference period. BPS also uses estimated consumption expenditures for certain items (such as rental payments for
households that receive free housing or live in their own property) in its aggregate. Furthermore, in the ‘own produced food’ category, BPS captures actual
consumption and evaluates it at local prices, to obtain a rupiah value that enters
the aggregate. However, only the module section of Susenas captures actual consumption in the ‘own produced food’ category; the core section asks households
for a direct rupiah estimate of the value of ‘own produced food’ consumption
7. The selection of households to be interviewed for Susenas is based on a stratiied sampling procedure. Consequently, BPS provides individual and household weights with the
Susenas dataset that allow BPS and researchers to derive representative welfare statistics.
It is not yet well understood to what degree BPS is able to avoid the undercounting of the
very poor and the very rich during the data collection process as well as in its construction
of individual and household weights. See the World Bank (2007) study for a more detailed
discussion on this issue.
8. BPS irst included questions on consumption expenditures in the Susenas core in 1992,
and these questions now appear in every Susenas round. Since 1993 BPS has greatly increased the number of households it samples for each annual Susenas round, from about
65,000 in 1992 to 202,000 in 1993. Since 1993 BPS has therefore been able to calculate annual
district-level welfare statistics. However, only since 2002 has BPS published oficial district
poverty igures. Moreover, while all selected households are asked to answer the core section, only about 25% of households had to answer the module section during 1993–2010.
Since 2011 all selected households have been asked to answer both the core questions and
the module questions. During 1993–2014, the consumption expenditure module was included in the Susenas rounds of 1993, 1996, 1998, 1999, 2002, 2005, 2008, 2011, 2012, 2013,
and 2014. Although not all Susenas modules contain data on consumption expenditure, in
this article the term ‘module’ will refer to the consumption expenditure module.
9. Susenas collects income data too, but these are not used by BPS for poverty measurement. Please see Leigh and Van der Eng’s (2010) and Nugraha and Lewis’s (2013) studies
on welfare (inequality) measurement using income data from Susenas.
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Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
191
(without recording actual consumption). For simplicity, and in line with the
related literature, in this article the term ‘consumption expenditure’ refers to the
BPS consumption aggregate for welfare (poverty) analysis.
Table 3 shows the collection period for those Susenas rounds used to derive
oficial poverty estimates. From 1976 to 1981 the structure of Susenas changed
substantially. Some of the earlier Susenas rounds and related expenditure questions were based on data collection throughout the year, and sometimes data were
collected using diaries rather than recall methods (BPS 1993; Surbakti 1995; World
Bank 2007). Between 1981 and 2002 BPS collected an expenditure module every
three years,10 while from 2002 it included a consumption module at least once a
year. For many years Susenas has been conducted at least twice a year. Between
1984 and 2010 the irst Susenas round of the year (February from 1984 to 2005, and
March from 2006 to 2010) has provided the data for that year’s oficial national
and provincial poverty igures; since 2011 BPS has provided two annual poverty
estimates (in March and September).
In 2002 BPS also changed its sampling procedure: before 2002 each Susenas
round was based on a new sample of households; since 2002 the February or
March round has contained a certain number of panel households (about 10,000)
that are interviewed in at least two consecutive February or March rounds.11
Consumption Aggregate, Item Coverage, and Recall Periods
The consumption expenditure information that BPS uses for measuring poverty
in Indonesia comes from the Susenas modules. During 1976–96 BPS modiied
the module questionnaire quite frequently, with questionnaires often differing
greatly from round to round. In general, as shown in table 3, the number of food
and non-food items covered in the questionnaire has increased since 1976. Since
1996 the design of the module questionnaire has been relatively consistent, collecting information on about 215 food and 90 non-food items.
Given the rise in living standards over time in Indonesia, expenditures on nonfood items play a much more important role than they did in the 1970s. BPS is
therefore now better able to capture these expenditures, having increased the
number of questions relating to the non-food section of the consumption aggregate. However, the main non-food categories (housing, goods and services, education, health, clothing, durable goods, taxes and insurances, and holidays and
festivities) have remained unchanged. Other important expenditure categories
are described below.12
1. Rental payments and utilities: At least since the 1976 Susenas BPS has
collected information on rental payments, including estimates based on selfassessments by households that do not pay rent (such as those that own a house
or receive free lodging) on what the rent would be if they were tenants. Since its
10. The years of the 1997–98 Asian inancial crisis are exceptions. BPS conducted additional Susenas consumption surveys, Susenas ‘Mini’, in December 1998 and August 1999,
to monitor the effects of the crisis. However, only the December 1998 igure from these two
surveys entered oficial poverty estimates.
11. The selection of new panel households occurs only once the panel is completed: up to
the end of 2010, this was three years; from 2011, ive years.
12. Sutanto and Avenzora (1999) provide more details on these expenditure categories.
TABLE 3 Susenas Overview, 1976–2014
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Consumption aggregate
used for poverty statistics
Number of items in
Susenas module
Year
Survey
period
Section
Observations
Food
1976
1978
1980
1981
1984
1987
1990
1993
1996
1999
2000
2001
2002
2003
2003
2004
2004
2005
2005
2006
2006
2007
2008
2009
2010
2011
2011
2012
2012
2013
2013
2014
One year
One year
February
One year
February
January
February
February
February
February
February
February
February
FebruaryN
FebruaryP
FebruaryN
FebruaryP
FebruaryN
JulyP
MarchN
JulyP
March
March
March
March
March
September
March
September
March
September
March
Module
Module
Module
Module
Module
Module
Module
Module
Module
Module
Core
Core
Module
Module
Core
Module
Core
Module
Module
Module
Core
Module
Module
Module
Module
Module
Module
Module
Module
Module
Module
Module
68,000
25,000
58,000
60,000
49,000
49,000
49,000
65,000
65,000
65,000
260,000*
260,000**
65,000***
10,000
260,000
10,000
260,000
10,000
68,000
10,000
280,000
68,000
68,000
68,000
68,000
75,000
75,000
75,000
75,000
71,000
71,000
71,000
181
125
118
179
179
201
202
196
216
214
NA
NA
214
214
NA
214
NA
214
214
215
NA
215
215
215
215
215
215
215
215
215
215
215
Change in
Non-food Susenas data
78
–
40
78
78
82
88
88
90
90
NA
NA
90
90
NA
90
NA
94
94
94
NA
94
94
94
94
94
94
94
94
94
94
94
NA
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
NA
NA
No
Yes
NA
No
NA
Yes
NA
Yes
NA
Yes
No
No
No
No
No
No
No
No
No
No
Source: Author’s compilations based on data from various BPS publications and National Socioeconomic Survey (Susenas) questionnaires.
Note: NA = not applicable. * Aceh Darussalam and Moluku not sampled. ** Aceh Darussalam not sampled. *** Aceh Darussalam, Moluku, Moluku Utara, and Papua not sampled. N sections and rounds
that were used to estimate national poverty estimates. P sections and rounds used to derive provincial
poverty estimates. Sample sizes for 1976 to 1981 are estimated based on Surbakti (1995). In the years
where provinces were not covered in Susenas, BPS predicted poverty rates or numbers for these areas
in order to enter the national estimates. The Susenas-type 1998 survey contained 10,000 households,
as did the Susenas ‘Mini’ survey in August 1999. In 1978, expenditures on non-food items, except for
tuition fees, were not collected. Since 2002, Susenas (in its February or March rounds) has contained
about 10,000 panel households and the panel cohort is replaced every three years. To what extent (nonrandom) attrition of panel households affects poverty measurement remains to be studied.
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Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
193
1976–81 poverty estimates, BPS has taken both actual rent and self-assessed rent
into account. Yet it is unclear whether BPS and researchers can rely on the quality
of these self-assessed values. In rural areas, for example, many people own their
house and may have little idea of its rental value. As discussed in more detail by
Hentschel and Lanjouw (1996, 2000), who use data on Ecuador, rural households
tend to underestimate the rental value. For this reason, some national statistics
agencies prefer to use hedonic regressions to impute housing prices rather than
rely on self-assessed household estimates. BPS, however, uses such estimates and
does not apply imputation techniques to the data. Another tricky component of
the consumption aggregate is the use of public utilities, such as electricity and
water supply. To accurately measure welfare levels, all services consumed by
households—including those obtained for free, such as drinking water, washing
water from a well or a river, or illegal electricity connections—should be priced in
the consumption aggregate so as to allow BPS to compare the derived beneits for
those households that pay for these services and those that do not. Since its irst
report, in 1984, BPS has not implemented any imputations to free services.
2. Transfer payments: A long-standing debate about transfer payments (such
as remittances) exists in the literature on poverty measurement. The inclusion of
transfer payments in the consumption aggregate would lead to double-counting
if the transfer appeared in the expenditure data of both the sending household
(under gifts and remittances) and the receiving household (under food and nonfood items). Owing to the risk of double-counting and the complexity of inancial
and family arrangements for transfer payments, most central statistics agencies
omit this category when calculating the poverty consumption aggregate and the
non-food basic-needs basket. Susenas collects information on transfer payments,
but BPS has decided not to use this expenditure category in calculating poverty
rates.13
3. Recall periods: During 1976–2014, Susenas used a consistent recall period
of one week for all food items (total household expenditure in the last week).
Likewise, BPS used one standard for all non-food items. During 1976–81, Susenas recorded a household’s item-speciic non-food expenditures by using a recall
period of three months (total household expenditures in the last three months).
Since 1984, Susenas has used two recall periods for all non-food items (total
household expenditures over [a] the last 12 months and [b] the last month). To
derive its non-food consumption aggregate for measuring poverty, BPS relies on
the monthly average of the 12-month recall period.
Technical Review
Despite several changes since 1984 in the way that BPS derives its oficial poverty igures, certain elements have remained constant. First, the welfare measure
underlying the oficial poverty statistics is still consumption expenditures per
capita, which is derived by dividing total household expenditures by the number
of household members. Second, the poverty rate itself is still deined as the share
of the overall population with per capita expenditure levels below the derived
poverty line(s).14 Third, oficial poverty lines have always consisted of a food
13. Nyberg (1976) and Van der Walle (1988) give good overviews of the composition of the
welfare consumption aggregate derived from earlier Susenas rounds.
14. The poverty lines are absolute not relative.
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Jan Priebe
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and a non-food component. The food component is adjusted to relect an intake
of 2,100 kilocalories per capita per day,15 whereby the calorie prices in order to
derive a rupiah value of the food poverty line have always been derived from
the reference population (who live just above the poverty line). Fourth, BPS still
uses an item-speciic (or share-speciic) non-food basket to derive the non-food
component of poverty lines.
The 1984 BPS Poverty Report
The 1984 BPS report provided poverty estimates for Indonesia from 1976 to 1981.
BPS obtained food poverty lines for these series by applying the food energy
intake method (Ravallion 1998, 2008).16 It converted all food expenditures into
kilocalories, which it then used to determine the average kilocalorie price. It
multiplied the price in the reference group by 2,100 to obtain the rupiah value
of the food poverty line.17 To determine the non-food poverty line, BPS applied
a pre-speciied basket of non-food items priced using implicit Susenas prices.18
It derived the non-food basket itself—and, implicitly, the non-food share of the
overall poverty line—by using what it refers to as ‘expert judgement’ and not
data from Susenas or from other BPS sources (Sutanto and Avenzora 1999). The
food poverty line and the valuation of the non-food basket led, then, to the overall
poverty line.19
In this approach, BPS calculated poverty lines separately for urban and rural
areas, using different underlying calorie prices and different non-food baskets.
Consequently, it derived national poverty rates by applying the rural (urban)
15. The 2,100-kilocalorie norm stems from the national food and nutrition workshop
(Widyakarya nasional pangan dan gizi) in Bogor in 1978 (LIPI 1978). BPS has not changed its
caloriic base of poverty measurement since its 1984 report. Likewise, despite internal discussions on the introduction of adult equivalence scales into poverty measurement—see
the BPS publications Analisis dan penghitungan tingkat kemiskinan (Analysis and calculation of the poverty rate) from 2005 and Penyempurnaan metode pengukuran kemiskinan rumah
tangga di Indonesia (Reinement of the method of measuring household poverty in Indonesia) from 2010—BPS has kept its per capita approach. BPS does not use any sort of protein
anchor in measuring poverty.
16. Since 1984 BPS has called its method of measuring poverty a ‘basic-needs approach’
(pendekatan kebutuhan dasar). Yet only since 1993 has it measured poverty in a way that is in
line with the usage of this term in the literature (Ravallion 1998, 2008).
17. In order to convert the recorded food expenditure information into calories, BPS relies
on nutrition composition tables published and regularly updated by Direktorat Bina Gizi
(the Directorate of Nutrition) in the Ministry of Health (previously Depkes). These tables
were irst published in 1964, with revisions in 1990, 1995, 2001, 2005, and 2009. Although
BPS relies on these tables, it does not document which poverty estimates are based on
which table.
18. Most developing countries began to determine the non-food poverty line by specifying
a detailed, item-speciic food basket without determining an explicit non-food basket. In
contrast, Indonesia began the opposite way, specifying a detailed non-food basket while
letting the food poverty line be determined by the average calorie price of the reference
population.
19. As documented by Sutanto and Avenzora (1999), only in 1993 did BPS start to calculate
its poverty igures by considering the entire per capita consumption distribution. Before
1993, BPS interpolated aggregated consumption statistics to estimate how many individuals were poor.
Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
195
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national poverty lines to all rural (urban) areas and by calculating the share of the
overall population that fell below the poverty lines.20 For its 1984 poverty estimate (BPS 1987), BPS adopted the same approach as for its 1976–81 series.
1987
For its 1987 estimates, BPS largely kept its 1984 method, though it adjusted the
way it calculated how calories consumed outside of the home (eating out) enter
the value of the food poverty line. Early in 1982 and 1985, BPS conducted smallscale expenditure surveys designed to capture how much food and how many
calories the reference population typically consumed outside of the home. From
the 1982 survey data, BPS calculated that about 10% of calories per capita were
derived from eating out. It revised these igures to 8% in urban areas and 7% in
rural areas, based on the 1985 survey. The food poverty lines during 1976–84 take
the 10% value into account, whereas the 1987 and 1990 values are based on the
new 1985 values (BPS 1984, 1987, 1992).21
1990
For its 1990 poverty estimates, BPS introduced the irst major change to the
approach it took in 1984. It derived rural and urban provincial poverty lines and
used them to calculate province-speciic and national (rural, urban, and overall)
poverty rates, whereby the prices of the food (average calorie price of the reference population) and non-food (prices per non-food commodity item in the nonfood basket) poverty lines were allowed to differ in rural and urban areas as well
as across provinces. Yet the sample-size limitations of the 1990 Susenas round
prevented BPS from deriving province-speciic rural and urban poverty lines for
more than 18 of 27 provinces, while it derived only one common rural and one
common urban poverty line for the remaining 9 provinces (Sutanto and Avenzora
1999).22 While BPS has continued to publish (rural, urban, and overall) national
poverty lines, these lines have not entered any BPS poverty calculations since
1990 and are therefore largely illustrative.
20. BPS publishes an overall national poverty line for illustrative purposes—it has never
been used to derive poverty igures in Indonesia. During 1976–87, only the rural and urban
poverty lines (at the national level) entered poverty calculations (Sutanto and Avenzora
1999). The deinition of rural and urban areas in Indonesia is updated approximately every
10 years, after each population census; McCulloch, Weisbrod, and Timmer (2007) show that
such revisions in certain areas can have signiicant effects on Indonesia’s poverty proile.
In 2014 BPS recalculated its 2013 poverty estimates using newly available population projections calculated using the Population Census 2010. According to BPS the switch to the
updated population numbers leads to only minor changes in the poverty igures (table 1).
21. The food poverty lines from 1976 until 1990 are based on the food energy intake method.
These lines are derived by multiplying an average kilocalorie price by 2,100. As explained
in more detail by Sutanto and Avenzora (1999), BPS applied several intermediary steps
before this average calorie price was obtained. One of these intermediary steps involved
the adjustment of the entire expenditure per capita distribution using the correction factors
for calories consumed outside of the home.
22. The nine remaining provinces were Bengkulu, Central Kalimantan, Central Sulawesi,
East Kalimantan, East Timor (now the nation of East Timor), Irian Jaya (now Papua and
West Papua), Jambi, Maluku, and Southeast Sulawesi. Only since 1993 has BPS derived
rural and urban poverty lines for each province.
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1993
In 1993 BPS made several important changes to the way it calculated oficial poverty igures. It abandoned the food energy intake method and introduced explicit
food baskets whose compositions could differ in rural and urban areas and across
provinces (as could item-speciic prices). In order to derive these baskets, BPS
looked at the expenditure patterns of the reference population.23 It also stopped
taking food eaten out into account when deriving the food poverty lines (Sutanto
and Avenzora 1999) and revised the way it derived the non-food poverty line. Up
to this point, BPS had obtained its non-food poverty line by specifying a non-food
basket that included 14 items in urban areas and 12 items in rural areas, determined by expert judgment and not survey data (at least not explicitly). In 1993
BPS changed this practice, conducting for the irst time its Survey on the BasicNeeds Commodity Basket (Survei Paket Komoditi Kebutuhan Dasar [SPKKD]),
on which it based its non-food basket from 1993 onwards. The 1993 SPKKD interviewed 800 households in 10 provinces (8 outside of Java), whereby the sample
underlying the SPKKD was exclusively the reference population. Compared with
Susenas, the SPKKD includes more detailed questions on non-food consumption;
BPS stresses that the SPKKD questionnaire tries especially to capture items consumed by the poor and the near-poor (Sutanto and Avenzora 1999).
In the 1993 SPKKD, BPS increased the number of items in its non-food basket to
25 in urban areas and 24 in rural areas. To derive the rupiah value of the non-food
poverty line, BPS used the SPKKD to calculate the subgroup expenditure share
of the respective items. It then multiplied all of the obtained subgroup expenditure share values from the SPKKD with the corresponding subgroup expenditure
amount in rupiah, as recorded in Susenas. The inal non-food poverty line, then,
was the sum of all 25 (24) obtained rupiah values.24 Given that the 1993 SPKKD
23. In its 1976–1990 estimates, BPS used the reference population only to ind the average
calorie price (food poverty line). Since 1993 it has used the reference population to determine the prices for the food poverty line, derive the non-food poverty line, and create
sampling frames for the SPKKD. Some circularity is involved in selecting the reference
population: the rupiah value of the poverty line depends on a reference group whose being
deined as such depends on the rupiah value of the poverty line. Pradhan et al. (2000, 2001)
discuss iterative methods of addressing this problem. BPS has taken a very practical approach by simply inlating by the consumer price index the poverty lines of the preceding
round. It then uses this inlation-adjusted poverty lines to select the reference population.
Since its 1984 poverty report, BPS has always selected a reference population with wealth
levels above the poverty line, which differs from the recommendations of many academics—such as Ravallion (1998)—who propose selecting a group of households whose wealth
levels are around or just below the poverty line.
24. To better understand how BPS handles the SPKKD in combination with Susenas, let us
assume that BPS has decided (based on SPKKD data) that three pieces of soap should be
included in the non-food basket, and that soap belongs to the toiletries subgroup. Let us
also assume that the expenditure on three pieces of soap constitutes 20% of all toiletries
expenditures of the reference group, as recorded in the SPKKD. In the next step, BPS
multiplies this 20% value by the recorded expenditure amount in rupiah of the toiletries
subgroup, as recorded in Susenas. Let us then assume that data from Susenas showed that
the reference population spends about Rp 100,000 on toiletries each month. Accordingly,
0.2 × Rp 100,000 = Rp 20,000 is the amount that enters the non-food poverty line. BPS applies this method to all selected non-food items.
Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
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contained only a relatively small sample, it distinguished between rural and
urban areas but did not calculate province-speciic expenditure shares.
1996
For its 1996 poverty estimates, BPS relied largely on its 1993 approach. It made
two important adjustments, however. It again revised its selection of items and
quantities in the food basket underlying the food poverty line, although it left the
number of chosen items unchanged at 52. It also extensively revised its method of
calculating the non-food poverty line. Where its 1993 estimates were based on the
1993 SPKKD, its 1996 estimates were based on the 1995 SPKKD, which resulted in
new and very different (sub)group expenditure shares. The 1995 SPKKD included
interviews with 5,000 households and covered all provinces, which allowed BPS
to change its 1993 approach and to calculate province-speciic subgroup expenditure share values for urban and rural areas (Sutanto and Avenzora 1999).
1998–99
In 1999 BPS announced that it was changing the way it calculates poverty and that
its new approach would lead to higher reported poverty rates than previously. To
demonstrate, it published two estimates for 1999—one based on the old method
and one on the new method. It also corrected its 1996 estimate (based on the 1999
method), which became the oficial 1996 estimate in Statistik Indonesia: Statistical
Yearbook of Indonesia from 1999 onwards.
In terms of methodological changes in its 1998–99 poverty estimates, BPS
changed the composition of its food basket and, as stated in Sutanto and Avenzora
(1999), switched to more expensive food items (the number of items remained
unaltered at 52). BPS chose a similar approach for its non-food poverty line, deciding to reanalyse the 1995 SPKKD and selecting more expensive non-food items.
It also increased the number of non-food items in the non-food basket, from 25 in
urban areas and 24 in rural areas to 27 in urban areas and 26 in rural areas. These
compositional changes saw the overall poverty line(s) rise, on the back of a large
increase in the non-food poverty line.
2000
In 2000 BPS adopted two major changes. First, it changed its deinition of the
reference population that it used to determine the food basket (items, quantities, prices) and the non-food basket (prices, sampling for the SPKKD). During
1976–99 BPS divided the reference population into per capita expenditure brackets in rupiah values, whereas from 2000 onwards it deined the reference population as the 20% who live above the poverty line.25 Second, BPS decided to use
the Susenas core for the irst time, in order to be able to publish oficial poverty
estimates each year. Given that the 2000 Susenas did not include a consumption
expenditure module, BPS’s decision involved making important adjustments to
25. It is reasonable to assume that the determination of the upper limit(s) of the rupiah
value that determines the reference population (the lower value is given by the poverty
line[s] for the 1976–99 estimates) was based on BPS having a certain share or number of
the population in mind. Therefore, the change in the deinition of the reference population
might have had only limited consequences in practice.
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its 1998–99 methodology. BPS derived its 2000 poverty lines by updating the 1999
rural and urban provincial poverty lines using the consumer price index (CPI);
a practice that BPS continued in 200126. Since the 2000 and 2001 estimates rely
on the Susenas core (which BPS assumed to under-report consumption expenditures), BPS reduced the value of the poverty lines by 10% to account for the lower
consumption igures (Ritonga and Avenzora 2002).27
2002
In 2002, in line with BPS’s thematic three-year cycle, a Susenas module collected
consumption expenditure information. BPS used the data to calculate itemspeciic prices, to revalue the food and non-food baskets, and to derive the consumption aggregate that is used in its poverty measurement. The 2002 poverty
estimate therefore largely follows the 1998–99 approach.28
2003
According to BPS’s thematic three-year cycle, the 2003 Susenas would not collect
consumption expenditure information. Yet BPS deviated from this practice by distributing a ‘Consumption expenditure module’ questionnaire to a small sample
of 10,000 households (out of 260,000 households in the February 2003 round). BPS
used the ensuing price data (module) to derive a irst set of rural and urban province-speciic poverty lines (step one). It then used these poverty lines to derive
national (rural, urban, and overall) poverty estimates (step two). However, BPS
considered the sample size of 10,000 households to be too small on which to base
its provincial poverty rates. In a third step BPS used data from the Susenas core to
derive poverty rates (rural, urban, and overall) by province whereby it adjusted
its initial province-speciic poverty lines obtained under step one by the same
scaling factor, so that summing the number of poor people by province would
produce the same national poverty igures as those obtained under step two.
Thus, for 2003 BPS implemented a top-down approach, whereby the provincial
poverty igures were determined partly by the national poverty estimates.
26. Since Indonesia’s CPI is based on urban areas only, BPS had to assume that prices
between rural and urban areas increased by the same amount. Likewise, since the CPI captures price developments that do not necessarily represent the consumption basket of the
reference population, BPS had to assume that these differences were negligible.
27. As shown by Pradhan (2009), the under-reporting of consumption in the Susenas core
section compared with that in the modules is more prevalent among the poor than the
non-poor. It is therefore questionable whether poverty estimates based on the modules are
comparable with those based on the core.
28. In this article, all information on changes during 2002–13 is based on various BPS
sources, including the annual rounds of Statistik Indonesia: Statistical Yearbook of Indonesia
and Data dan informasi kemiskinan (Poverty information and data); Analisis dan penghitungan
tingkat kemiskinan (Analysis and calculation of the poverty rate) for 2005, 2008, 2009, 2010,
and 2011; the (bi-)annual rounds of Tingkat kemiskinan di Indonesia (The level of poverty
in Indonesia) since 2006; and BPS’s (2010) report. Certain information described in this
article is not tabulated in these publications but draws on discussions with BPS representatives.
Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
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2004
In 2004 BPS continued its 2003 approach by administering the ‘Consumption
expenditure module’ questionnaire to 10,000 households (out of 260,000 households in the February 2004 round). Similar to 2003, BPS used a top-down approach
to calibrate its provincial poverty igures to match the national poverty igures.
In addition, BPS adjusted the food basket that determined the food poverty line.
While the overall number of selected food items remained at 52, BPS adjusted the
type and relative weight of some of the selected items.
2005
For the February 2005 round of the Susenas BPS decided to survey only 10,000
households, all of which were asked to complete the consumption expenditure
module. As in 2003 and 2004, BPS determined the national (rural, urban, and
overall) poverty rates based on the February round. For its provincial poverty
estimates in 2005, BPS relied on the July round of Susenas, which in its module
collected consumption information on about 68,000 households (out of 256,000
households). BPS again used a top-down approach, though in 2005 it calibrated
the provincial poverty igures from July to match the national estimates from
February. Furthermore, in 2005 BPS substantially altered the composition of the
non-food basket. In 2004 BPS had conducted a new round of the SPKKD, which
covered 1,050 households across all provinces. In 2005 these estimates entered
BPS’s poverty calculations for the irst time.
2006
In 2006 BPS followed its approach of 2005 by conducting only a small Susenas
round in the irst quarter of the year (March 2
ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20
Official Poverty Measurement in Indonesia since
1984: A Methodological Review
Jan Priebe
To cite this article: Jan Priebe (2014) Official Poverty Measurement in Indonesia since 1984:
A Methodological Review, Bulletin of Indonesian Economic Studies, 50:2, 185-205, DOI:
10.1080/00074918.2014.938406
To link to this article: http://dx.doi.org/10.1080/00074918.2014.938406
Published online: 30 Jul 2014.
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Bulletin of Indonesian Economic Studies, Vol. 50, No. 2, 2014: 185–205
OFFICIAL POVERTY MEASUREMENT IN INDONESIA SINCE
1984: A METHODOLOGICAL REVIEW
Jan Priebe*
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University of Göttingen; TNP2K, Jakarta
This article describes how the measurement of the oficial Indonesian poverty igures has evolved since 1984, when Badan Pusat Statistik (BPS), Indonesia’s central
statistics agency, published its irst poverty report. Since then, BPS has on several
occasions revised the underlying methodology for how it calculates poverty. These
changes have, in general, improved the way that poverty in Indonesia is measured, but they make it dificult to compare poverty igures over time. In fact, only
poverty estimates (at the national and provincial level) since 2007 are based on the
same methodological approach. This article presents the irst detailed description
of oficial poverty measurement in Indonesia since Booth’s (1993) study, in English,
and Sutanto and Avenzora’s (1999) study, in Indonesian. It constitutes a unique repository for anybody who wants to understand the technical details of oficial poverty measurement in Indonesia.
Keywords: poverty measurement, poverty line, prices, methodology, Susenas
JEL classiication: I31, I32
INTRODUCTION
Oficial poverty statistics in Indonesia are calculated by Badan Pusat Statistik
(BPS), the central statistics agency. Since the mid-1980s, policymakers and academics have used BPS poverty statistics to guide the allocation of public funds and to
derive policy recommendations. Yet despite the importance of these statistics for
policy, little documentation exists on how BPS derives its poverty igures. Although
BPS regularly publishes the reports Data dan informasi kemiskinan (Poverty data and
information) and Analisis dan penghitungan tingkat kemiskinan (Analysis and calculation of the poverty rate), the technical sections in these reports are very short. The
* TNP2K = Tim Nasional Percepatan Penanggulangan Kemiskinan (National Team for
the Acceleration of Poverty Reduction), Ofice of the Vice-President. I would like to thank
Anne Booth, Isis Gaddis, Fiona Howell, Stephan Klasen, Riyana Miranti, Suahasil Nazara, Ririn Purnamasari, Elan Satriawan, Sudarno Sumarto, Matthew Wai-Poi, and all three
anonymous referees for valuable input and comments, and Mercoledi Nikman Nasiir, Wisnu Harto Adi Wijoya, and Novat Pugo Sambodo for their outstanding research assistance.
Special thanks goes to BPS, and in particular Ahmad Avenzora, for providing me with
clariications on the way that it has calculated oficial poverty rates. The views expressed
in this article are mine alone and do not represent the views of TNP2K.
ISSN 0007-4918 print/ISSN 1472-7234 online/14/000185-21
http://dx.doi.org/10.1080/00074918.2014.938406
© 2014 Indonesia Project ANU
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Jan Priebe
last detailed description in English on BPS poverty measurement is that of Booth
(1993), while the last in Indonesian is that of Sutanto and Avenzora (1999).1 These
publications are rich sources of information on poverty measurement in Indonesia,
but they are now dated and do not cover every important technical area.
The absence since 1993 of any detailed documentation in English on oficial
poverty measurement in Indonesia is unsatisfactory. Until about 1993, the World
Bank regularly provided a detailed source of information on poverty measurement. Before 1984, the year of BPS’s irst oficial poverty report, the World Bank
and its staff produced its own poverty estimates for the country in order to assess
the extent and the trend of poverty in Indonesia (Booth 1993). It stopped producing such estimates after 1984, the year of BPS’s irst oficial poverty report, to
avoid conlicts with the oficial BPS igures.2 Yet World Bank staff continued to
provide important technical input into BPS’s methodology for calculating oficial
poverty rates. In particular, Martin Ravallion, who worked on poverty measurement in Indonesia in the late 1980s and early 1990s, published a series of important papers and articles (Ravallion and Huppi 1991; Ravallion and Van der Walle
1991a, 1991b; Bidani and Ravallion 1993; World Bank 1993). With the World Bank
redirecting its activities in Indonesia, the publication of technical articles and
reports related to oficial BPS poverty measurement stopped, and the academic
literature has yet to ill the knowledge gap. While most studies have relied on
the oficial BPS poverty statistics, a few have tried to come up with alternative
poverty estimates (Asra 1989; Pradhan et al. 2000, 2001; Levinsohn, Berry, and
Friedman 2003; Nashihin 2007; Miranti 2010; Miranti et al. 2013). The oficial BPS
methodology, however, remains largely undiscussed in these studies.
This article’s principal objective, then, is to ill an important gap in the literature by explaining in detail how poverty is oficially measured in Indonesia and
how BPS‘s methodological approach of measuring poverty has evolved. It constitutes a unique repository for anybody who wants to understand the technical
details of oficial poverty measurement in Indonesia.
POVERTY MEASUREMENT UNTIL 1984
Poverty measurement in Indonesia has a long history—in 1928 the predecessor
of BPS published its irst study of household budgets in urban areas (CKS 1928).
Middle-income groups were overrepresented in that study.3 Later studies, such as
the Investigation into Living Standards of Coolie Workers in Batavia, from 1937,
and the so-called Coolie Budget Commission study of living standards of farmers
1. Other BPS documents that address poverty measurement in Indonesia include those of
Ritonga and Avenzora (2002), BPS (2002, 2010), and Maksum (2004). However, these documents lack important information and therefore do not help in obtaining a more thorough
overview of poverty measurement in Indonesia.
2. Confusion still arises on occasion about the World Bank’s poverty igures ($1.00 or $1.25
per day [purchasing power parity]). While these igures make sense only in an international comparison, they are often inappropriately used in policy forums and the media by
those interpreting them as national poverty rates and trends. See Sumner and Edward’s
(2014) study, in this issue.
3. The survey was based on 348 households of public servants in urban areas. The methodology required them to record expenditure over several weeks, which caused the sample to
be biased to middle-income households able to read, write, and calculate.
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Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
187
and plantation workers during 1939–40, broadened the scope of measurement of
welfare of the population in Indonesia (Booth 1993).
After independence the irst unoficial poverty estimates appeared between
1975 and 1986. According to Booth (1993), the main approaches at that time
were those of Sajogyo (1975; Sajogyo and Wiradi 1985), Esmara (1986), and the
World Bank and its staff (1980; Chernichovsky and Meesok 1984).4 The ‘Sajogyo
approach’ classiied persons living in rural areas as very poor if their annual expenditures were below 240 kilograms of milled rice (in purchasing power) and poor if
their annual expenditures were between 240 and 320 kilograms. The urban poverty line was derived by applying a 50% mark-up on the rural poverty line. At
that time, the World Bank published two very different approaches to measuring
poverty: its report Employment and Income Distribution in Indonesia (1980) deined
the poor as those with monthly expenditure below Rp 3,000 per capita,5 while
Chernichovsky and Meesok (1984) deined the poor as those in the bottom 40% of
the per capita expenditure distribution.6
At the time, the most inluential proposal on how to measure poverty in Indonesia came from Esmara (1986). Using data from the 1970, 1976, 1978, and 1980
rounds of the National Socio-economic Survey (Susenas), the ‘Esmara approach’
formulated a basic-needs food and non-food package that could differ in urban
and rural areas. According to Esmara, the underlying basket of food and non-food
items should be re-evaluated in each new Susenas round, leading to a new underlying basket or what Esmara called a ‘dynamic poverty line’.
OFFICIAL POVERTY MEASUREMENT
In 1984 BPS published its irst oficial poverty igures for Indonesia, in Jumlah
dan persentase penduduk miskin di Indonesia 1976–1981 (The number and percentage
of poor in Indonesia 1976–1981), using data from the 1976, 1978, 1980, and 1981
rounds of Susenas (BPS 1984). Since then, BPS has regularly updated its poverty
igures and adjusted the way it calculates poverty. In this section, I describe how
poverty measurement has evolved since 1984. I distinguish between the principal data source underlying poverty measurement (Susenas) and more technical
aspects, such as the composition of the food and non-food baskets and the treatment of food consumed outside of the home. Tables 1 and 2 depict the corresponding poverty estimates and poverty lines.
4. Recent instances of the BPS publication Analisis dan penghitungan tingkat kemiskinan
(Analysis and calculation of the poverty rate) list further unoficial poverty lines and poverty estimates that emerged between 1975 and 1985.
5. A province-speciic rural and urban spatial price delator was applied to the consumption aggregate whereby the reference category was Jakarta. Indonesia deines districts as
municipalities (kota) or predominantly rural areas (kabupaten). Each district can then be
divided into urban precincts (kelurahan) and rural villages (desa). BPS’s deinition of rural
and urban areas in its poverty measurement uses the desa and kelurahan classiications.
6. In addition, the World Bank (1990) draws on an internal analysis by V. V. Rao from 1983,
in which poverty estimates are based on valuing the price of 16 kilograms of rice (step one),
multiplying the obtained value by 1.25 to allow for other food expenditures (step two),
and then dividing this igure by the share of food expenditures in total expenditures of the
expenditure group whose total food expenditures were closest to those in step two. Rao’s
estimates were calculated separately for each region (provinces and rural and urban areas).
TABLE 1 Oficial Poverty Statistics, 1976–2014
Poverty rate
(%)
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Urban Rural
Number of poor
individuals
(million)
Total Urban Rural
Total
Remarks
1976
1978
1980
1981
1984
1987
1990
1993
38.8
30.8
29.0
28.1
23.1
20.1
16.8
13.5
40.4
33.4
28.4
26.5
21.2
16.1
14.3
13.8
40.1
33.3
28.6
26.9
21.6
17.4
15.1
13.7
10.0
8.3
9.5
9.3
9.3
9.7
9.4
8.7
44.2
38.9
32.8
31.3
25.7
20.3
17.8
17.2
54.2
47.2
42.3
40.6
35.0
30.0
27.2
25.9
1996
1996
1996
9.7
19.9
19.8
12.3
13.7
13.4
11.3
17.7
17.5
7.2
9.6
9.4
15.3
24.9
24.6
22.5
34.5 1998 method; SA
34.0 1998 method; RA & statistical yearbooks
1998
1998
21.9
14.4
25.7
20.1
24.2
17.9
17.6
11.6
31.9
24.9
49.5
36.5 1996 method; SA
1999
1999
1999
19.4
8.9
15.1
26.0
13.6
20.2
23.4
11.7
18.2
15.6
7.3
12.4
32.3
16.9
25.1
48.0
24.2 1996 method; SA
37.5 Susenas ‘Mini’; SA
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011M
2011S
2012M
2012S
2013M
2013M
14.6
9.8
14.5
13.6
12.1
11.4
13.5
12.5
11.4
10.7
9.9
9.2
9.1
8.8
8.6
8.4
8.4
22.4
24.8
21.1
20.2
20.1
19.5
21.8
20.4
18.6
17.4
16.6
15.7
15.6
15.1
14.7
14.3
14.3
19.1
18.4
18.2
17.4
16.7
16.0
17.8
16.6
15.2
14.2
13.3
12.5
12.4
12.0
11.7
11.4
11.4
12.3
8.6
13.3
12.2
11.4
12.4
14.5
13.6
12.6
11.9
11.1
11.1
11.0
10.6
10.5
10.3
10.4
26.4
29.3
25.1
25.1
24.8
22.7
24.8
23.6
22.0
20.6
19.9
19.0
18.9
18.5
18.1
17.7
17.8
38.7
37.9
38.4
37.3
36.1
35.1
39.3
37.2
34.5
32.5
31.0
30.0
29.9
29.1
28.6
28.1
28.2
2013S
2013S
8.5
8.6
14.4
14.4
11.5
11.5
10.6
10.7
17.9
17.9
2014M
8.3
14.2
11.3
10.5
17.8
28.6
28.6 BPS revisions in 2014, based on newly available
population projections related to the Population
Census 2010
28.3
*
**
***
BPS revisions in 2014, based on newly available
population projections related to the Population
Census 2010
Source: Author’s compilations based on data from various BPS publications.
Note: Shaded rows represent alternative scenarios or revisions. SA = Sutanto and Avenzora (1999).
RA = Ritonga and Avenzora (2002). * Predicted values for Aceh Darussalam and Moluku. ** Predicted
values for Aceh Darussalam. *** Predicted values for Aceh Darussalam, Moluku, Moluku Utara, and
Papua. M March round. S September round.
TABLE 2 Oficial Urban and Rural Poverty Lines, 1976–2014
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Urban
Food
poverty line
(Rp/month)
Non-food
share
(%)
1976
1978
1980
1981
1984
1987
1990
1993
1996
1998
3,901
4,284
5,881
8,288
11,527
15.9
16.0
16.2
18.0
19.1
17,520
23,303
29,681
71,058
1999
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011M
2011S
2012M
2012S
2013M
2013S
2014M
Rural
Total
Food
poverty line poverty line
(Rp/month) (Rp/month)
Non-food
share
(%)
Total
poverty line
(Rp/month)
2,685
2,805
4,179
5,517
7,239
6.1
6.3
6.5
6.5
7.0
15.1
16.5
22.4
26.7
4,522
4,969
6,831
9,777
13,731
17,381
20,614
27,905
38,246
96,959
12,617
15,576
23,197
56,745
5.1
14.6
15.4
22.0
2,849
2,981
4,449
5,877
7,746
10,294
13,295
18,244
27,413
72,780
70,959
64,396
23.2
28.0
92,409
89,845
59,822
52,319
19.5
24.6
74,272
69,420
70,364
76,798
93,351
23.2
23.2
28.5
59,316
64,740
73,030
19.5
19.5
24.3
103,992
126,163
132,258
143,897
155,909
163,077
177,342
184,919
187,194
194,207
202,137
215,750
223,091
31.0
27.6
29.6
29.8
29.8
30.0
29.9
29.9
30.0
30.0
30.1
30.1
30.0
91,632
100,011
130,499
138,803
143,455
150,799
174,290
187,942
204,896
222,123
232,989
253,016
263,594
267,408
277,382
289,041
308,826
318,514
84,014
102,907
116,265
127,207
139,331
148,939
165,211
172,723
177,521
185,967
196,215
213,250
221,379
28.4
21.2
20.8
21.4
22.5
22.6
22.6
22.6
22.6
22.7
22.5
22.7
22.6
73,648
80,382
96,512
105,888
108,725
117,259
130,584
146,837
161,831
179,834
192,354
213,395
223,181
229,226
240,441
253,273
275,779
286,097
Source: Author’s compilations based on data from various BPS publications.
Note: Shaded row represents Susenas ‘Mini’. Poverty lines are in current rupiah per capita. Reported
poverty lines for 1976–87 were used to derive oficial poverty estimates. Later poverty estimates are
based on rural or urban provincial poverty lines, which are not reported in this article. Non-food
share = non-food poverty line divided by the total poverty line. M March round. S September round.
The value of the food poverty line for 1987 was tabulated in BPS (1992). Unfortunately, this document
could not be located by BPS. For 2003 and 2004 the values of the food and non-food poverty line were
not available from BPS.
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190
Jan Priebe
Susenas: An Overview
All oficial poverty estimates in Indonesia have used data from Susenas. The frequency, timing, and questionnaire design of the survey itself has changed much
since its irst round, in 1963.7 Susenas consists of a core survey and a number of
modules; the core is administered in each Susenas round and to every selected
household. In contrast, the module questions change from round to round and in
some Susenas rounds are administered to only a subsample of households. Before
1992 the core comprised only ive questions (four demographic and one educational). Since 1992 BPS has used a completely revised core questionnaire that,
among other information, captures consumption expenditure information in each
Susenas round.8 Yet not every Susenas module includes questions on consumption expenditure, so despite the availability of annual Susenas data since 1992 BPS
has not been able to publish poverty igures for every round of the survey.9
To measure poverty, BPS constructs a rupiah-valued welfare aggregate—largely
by summing the rupiah values of several expenditure items and categories—and
then benchmarks it against the relevant poverty line. To obtain consumption (or
consumption-related) expenditure for each item and category in the aggregate,
BPS uses a recall period in which the incurred expenditures relect as closely as
possible the actual consumption in a suitable reference period. BPS also uses estimated consumption expenditures for certain items (such as rental payments for
households that receive free housing or live in their own property) in its aggregate. Furthermore, in the ‘own produced food’ category, BPS captures actual
consumption and evaluates it at local prices, to obtain a rupiah value that enters
the aggregate. However, only the module section of Susenas captures actual consumption in the ‘own produced food’ category; the core section asks households
for a direct rupiah estimate of the value of ‘own produced food’ consumption
7. The selection of households to be interviewed for Susenas is based on a stratiied sampling procedure. Consequently, BPS provides individual and household weights with the
Susenas dataset that allow BPS and researchers to derive representative welfare statistics.
It is not yet well understood to what degree BPS is able to avoid the undercounting of the
very poor and the very rich during the data collection process as well as in its construction
of individual and household weights. See the World Bank (2007) study for a more detailed
discussion on this issue.
8. BPS irst included questions on consumption expenditures in the Susenas core in 1992,
and these questions now appear in every Susenas round. Since 1993 BPS has greatly increased the number of households it samples for each annual Susenas round, from about
65,000 in 1992 to 202,000 in 1993. Since 1993 BPS has therefore been able to calculate annual
district-level welfare statistics. However, only since 2002 has BPS published oficial district
poverty igures. Moreover, while all selected households are asked to answer the core section, only about 25% of households had to answer the module section during 1993–2010.
Since 2011 all selected households have been asked to answer both the core questions and
the module questions. During 1993–2014, the consumption expenditure module was included in the Susenas rounds of 1993, 1996, 1998, 1999, 2002, 2005, 2008, 2011, 2012, 2013,
and 2014. Although not all Susenas modules contain data on consumption expenditure, in
this article the term ‘module’ will refer to the consumption expenditure module.
9. Susenas collects income data too, but these are not used by BPS for poverty measurement. Please see Leigh and Van der Eng’s (2010) and Nugraha and Lewis’s (2013) studies
on welfare (inequality) measurement using income data from Susenas.
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Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
191
(without recording actual consumption). For simplicity, and in line with the
related literature, in this article the term ‘consumption expenditure’ refers to the
BPS consumption aggregate for welfare (poverty) analysis.
Table 3 shows the collection period for those Susenas rounds used to derive
oficial poverty estimates. From 1976 to 1981 the structure of Susenas changed
substantially. Some of the earlier Susenas rounds and related expenditure questions were based on data collection throughout the year, and sometimes data were
collected using diaries rather than recall methods (BPS 1993; Surbakti 1995; World
Bank 2007). Between 1981 and 2002 BPS collected an expenditure module every
three years,10 while from 2002 it included a consumption module at least once a
year. For many years Susenas has been conducted at least twice a year. Between
1984 and 2010 the irst Susenas round of the year (February from 1984 to 2005, and
March from 2006 to 2010) has provided the data for that year’s oficial national
and provincial poverty igures; since 2011 BPS has provided two annual poverty
estimates (in March and September).
In 2002 BPS also changed its sampling procedure: before 2002 each Susenas
round was based on a new sample of households; since 2002 the February or
March round has contained a certain number of panel households (about 10,000)
that are interviewed in at least two consecutive February or March rounds.11
Consumption Aggregate, Item Coverage, and Recall Periods
The consumption expenditure information that BPS uses for measuring poverty
in Indonesia comes from the Susenas modules. During 1976–96 BPS modiied
the module questionnaire quite frequently, with questionnaires often differing
greatly from round to round. In general, as shown in table 3, the number of food
and non-food items covered in the questionnaire has increased since 1976. Since
1996 the design of the module questionnaire has been relatively consistent, collecting information on about 215 food and 90 non-food items.
Given the rise in living standards over time in Indonesia, expenditures on nonfood items play a much more important role than they did in the 1970s. BPS is
therefore now better able to capture these expenditures, having increased the
number of questions relating to the non-food section of the consumption aggregate. However, the main non-food categories (housing, goods and services, education, health, clothing, durable goods, taxes and insurances, and holidays and
festivities) have remained unchanged. Other important expenditure categories
are described below.12
1. Rental payments and utilities: At least since the 1976 Susenas BPS has
collected information on rental payments, including estimates based on selfassessments by households that do not pay rent (such as those that own a house
or receive free lodging) on what the rent would be if they were tenants. Since its
10. The years of the 1997–98 Asian inancial crisis are exceptions. BPS conducted additional Susenas consumption surveys, Susenas ‘Mini’, in December 1998 and August 1999,
to monitor the effects of the crisis. However, only the December 1998 igure from these two
surveys entered oficial poverty estimates.
11. The selection of new panel households occurs only once the panel is completed: up to
the end of 2010, this was three years; from 2011, ive years.
12. Sutanto and Avenzora (1999) provide more details on these expenditure categories.
TABLE 3 Susenas Overview, 1976–2014
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Consumption aggregate
used for poverty statistics
Number of items in
Susenas module
Year
Survey
period
Section
Observations
Food
1976
1978
1980
1981
1984
1987
1990
1993
1996
1999
2000
2001
2002
2003
2003
2004
2004
2005
2005
2006
2006
2007
2008
2009
2010
2011
2011
2012
2012
2013
2013
2014
One year
One year
February
One year
February
January
February
February
February
February
February
February
February
FebruaryN
FebruaryP
FebruaryN
FebruaryP
FebruaryN
JulyP
MarchN
JulyP
March
March
March
March
March
September
March
September
March
September
March
Module
Module
Module
Module
Module
Module
Module
Module
Module
Module
Core
Core
Module
Module
Core
Module
Core
Module
Module
Module
Core
Module
Module
Module
Module
Module
Module
Module
Module
Module
Module
Module
68,000
25,000
58,000
60,000
49,000
49,000
49,000
65,000
65,000
65,000
260,000*
260,000**
65,000***
10,000
260,000
10,000
260,000
10,000
68,000
10,000
280,000
68,000
68,000
68,000
68,000
75,000
75,000
75,000
75,000
71,000
71,000
71,000
181
125
118
179
179
201
202
196
216
214
NA
NA
214
214
NA
214
NA
214
214
215
NA
215
215
215
215
215
215
215
215
215
215
215
Change in
Non-food Susenas data
78
–
40
78
78
82
88
88
90
90
NA
NA
90
90
NA
90
NA
94
94
94
NA
94
94
94
94
94
94
94
94
94
94
94
NA
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
NA
NA
No
Yes
NA
No
NA
Yes
NA
Yes
NA
Yes
No
No
No
No
No
No
No
No
No
No
Source: Author’s compilations based on data from various BPS publications and National Socioeconomic Survey (Susenas) questionnaires.
Note: NA = not applicable. * Aceh Darussalam and Moluku not sampled. ** Aceh Darussalam not sampled. *** Aceh Darussalam, Moluku, Moluku Utara, and Papua not sampled. N sections and rounds
that were used to estimate national poverty estimates. P sections and rounds used to derive provincial
poverty estimates. Sample sizes for 1976 to 1981 are estimated based on Surbakti (1995). In the years
where provinces were not covered in Susenas, BPS predicted poverty rates or numbers for these areas
in order to enter the national estimates. The Susenas-type 1998 survey contained 10,000 households,
as did the Susenas ‘Mini’ survey in August 1999. In 1978, expenditures on non-food items, except for
tuition fees, were not collected. Since 2002, Susenas (in its February or March rounds) has contained
about 10,000 panel households and the panel cohort is replaced every three years. To what extent (nonrandom) attrition of panel households affects poverty measurement remains to be studied.
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Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
193
1976–81 poverty estimates, BPS has taken both actual rent and self-assessed rent
into account. Yet it is unclear whether BPS and researchers can rely on the quality
of these self-assessed values. In rural areas, for example, many people own their
house and may have little idea of its rental value. As discussed in more detail by
Hentschel and Lanjouw (1996, 2000), who use data on Ecuador, rural households
tend to underestimate the rental value. For this reason, some national statistics
agencies prefer to use hedonic regressions to impute housing prices rather than
rely on self-assessed household estimates. BPS, however, uses such estimates and
does not apply imputation techniques to the data. Another tricky component of
the consumption aggregate is the use of public utilities, such as electricity and
water supply. To accurately measure welfare levels, all services consumed by
households—including those obtained for free, such as drinking water, washing
water from a well or a river, or illegal electricity connections—should be priced in
the consumption aggregate so as to allow BPS to compare the derived beneits for
those households that pay for these services and those that do not. Since its irst
report, in 1984, BPS has not implemented any imputations to free services.
2. Transfer payments: A long-standing debate about transfer payments (such
as remittances) exists in the literature on poverty measurement. The inclusion of
transfer payments in the consumption aggregate would lead to double-counting
if the transfer appeared in the expenditure data of both the sending household
(under gifts and remittances) and the receiving household (under food and nonfood items). Owing to the risk of double-counting and the complexity of inancial
and family arrangements for transfer payments, most central statistics agencies
omit this category when calculating the poverty consumption aggregate and the
non-food basic-needs basket. Susenas collects information on transfer payments,
but BPS has decided not to use this expenditure category in calculating poverty
rates.13
3. Recall periods: During 1976–2014, Susenas used a consistent recall period
of one week for all food items (total household expenditure in the last week).
Likewise, BPS used one standard for all non-food items. During 1976–81, Susenas recorded a household’s item-speciic non-food expenditures by using a recall
period of three months (total household expenditures in the last three months).
Since 1984, Susenas has used two recall periods for all non-food items (total
household expenditures over [a] the last 12 months and [b] the last month). To
derive its non-food consumption aggregate for measuring poverty, BPS relies on
the monthly average of the 12-month recall period.
Technical Review
Despite several changes since 1984 in the way that BPS derives its oficial poverty igures, certain elements have remained constant. First, the welfare measure
underlying the oficial poverty statistics is still consumption expenditures per
capita, which is derived by dividing total household expenditures by the number
of household members. Second, the poverty rate itself is still deined as the share
of the overall population with per capita expenditure levels below the derived
poverty line(s).14 Third, oficial poverty lines have always consisted of a food
13. Nyberg (1976) and Van der Walle (1988) give good overviews of the composition of the
welfare consumption aggregate derived from earlier Susenas rounds.
14. The poverty lines are absolute not relative.
194
Jan Priebe
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and a non-food component. The food component is adjusted to relect an intake
of 2,100 kilocalories per capita per day,15 whereby the calorie prices in order to
derive a rupiah value of the food poverty line have always been derived from
the reference population (who live just above the poverty line). Fourth, BPS still
uses an item-speciic (or share-speciic) non-food basket to derive the non-food
component of poverty lines.
The 1984 BPS Poverty Report
The 1984 BPS report provided poverty estimates for Indonesia from 1976 to 1981.
BPS obtained food poverty lines for these series by applying the food energy
intake method (Ravallion 1998, 2008).16 It converted all food expenditures into
kilocalories, which it then used to determine the average kilocalorie price. It
multiplied the price in the reference group by 2,100 to obtain the rupiah value
of the food poverty line.17 To determine the non-food poverty line, BPS applied
a pre-speciied basket of non-food items priced using implicit Susenas prices.18
It derived the non-food basket itself—and, implicitly, the non-food share of the
overall poverty line—by using what it refers to as ‘expert judgement’ and not
data from Susenas or from other BPS sources (Sutanto and Avenzora 1999). The
food poverty line and the valuation of the non-food basket led, then, to the overall
poverty line.19
In this approach, BPS calculated poverty lines separately for urban and rural
areas, using different underlying calorie prices and different non-food baskets.
Consequently, it derived national poverty rates by applying the rural (urban)
15. The 2,100-kilocalorie norm stems from the national food and nutrition workshop
(Widyakarya nasional pangan dan gizi) in Bogor in 1978 (LIPI 1978). BPS has not changed its
caloriic base of poverty measurement since its 1984 report. Likewise, despite internal discussions on the introduction of adult equivalence scales into poverty measurement—see
the BPS publications Analisis dan penghitungan tingkat kemiskinan (Analysis and calculation of the poverty rate) from 2005 and Penyempurnaan metode pengukuran kemiskinan rumah
tangga di Indonesia (Reinement of the method of measuring household poverty in Indonesia) from 2010—BPS has kept its per capita approach. BPS does not use any sort of protein
anchor in measuring poverty.
16. Since 1984 BPS has called its method of measuring poverty a ‘basic-needs approach’
(pendekatan kebutuhan dasar). Yet only since 1993 has it measured poverty in a way that is in
line with the usage of this term in the literature (Ravallion 1998, 2008).
17. In order to convert the recorded food expenditure information into calories, BPS relies
on nutrition composition tables published and regularly updated by Direktorat Bina Gizi
(the Directorate of Nutrition) in the Ministry of Health (previously Depkes). These tables
were irst published in 1964, with revisions in 1990, 1995, 2001, 2005, and 2009. Although
BPS relies on these tables, it does not document which poverty estimates are based on
which table.
18. Most developing countries began to determine the non-food poverty line by specifying
a detailed, item-speciic food basket without determining an explicit non-food basket. In
contrast, Indonesia began the opposite way, specifying a detailed non-food basket while
letting the food poverty line be determined by the average calorie price of the reference
population.
19. As documented by Sutanto and Avenzora (1999), only in 1993 did BPS start to calculate
its poverty igures by considering the entire per capita consumption distribution. Before
1993, BPS interpolated aggregated consumption statistics to estimate how many individuals were poor.
Oficial Poverty Measurement in Indonesia since 1984: A Methodological Review
195
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national poverty lines to all rural (urban) areas and by calculating the share of the
overall population that fell below the poverty lines.20 For its 1984 poverty estimate (BPS 1987), BPS adopted the same approach as for its 1976–81 series.
1987
For its 1987 estimates, BPS largely kept its 1984 method, though it adjusted the
way it calculated how calories consumed outside of the home (eating out) enter
the value of the food poverty line. Early in 1982 and 1985, BPS conducted smallscale expenditure surveys designed to capture how much food and how many
calories the reference population typically consumed outside of the home. From
the 1982 survey data, BPS calculated that about 10% of calories per capita were
derived from eating out. It revised these igures to 8% in urban areas and 7% in
rural areas, based on the 1985 survey. The food poverty lines during 1976–84 take
the 10% value into account, whereas the 1987 and 1990 values are based on the
new 1985 values (BPS 1984, 1987, 1992).21
1990
For its 1990 poverty estimates, BPS introduced the irst major change to the
approach it took in 1984. It derived rural and urban provincial poverty lines and
used them to calculate province-speciic and national (rural, urban, and overall)
poverty rates, whereby the prices of the food (average calorie price of the reference population) and non-food (prices per non-food commodity item in the nonfood basket) poverty lines were allowed to differ in rural and urban areas as well
as across provinces. Yet the sample-size limitations of the 1990 Susenas round
prevented BPS from deriving province-speciic rural and urban poverty lines for
more than 18 of 27 provinces, while it derived only one common rural and one
common urban poverty line for the remaining 9 provinces (Sutanto and Avenzora
1999).22 While BPS has continued to publish (rural, urban, and overall) national
poverty lines, these lines have not entered any BPS poverty calculations since
1990 and are therefore largely illustrative.
20. BPS publishes an overall national poverty line for illustrative purposes—it has never
been used to derive poverty igures in Indonesia. During 1976–87, only the rural and urban
poverty lines (at the national level) entered poverty calculations (Sutanto and Avenzora
1999). The deinition of rural and urban areas in Indonesia is updated approximately every
10 years, after each population census; McCulloch, Weisbrod, and Timmer (2007) show that
such revisions in certain areas can have signiicant effects on Indonesia’s poverty proile.
In 2014 BPS recalculated its 2013 poverty estimates using newly available population projections calculated using the Population Census 2010. According to BPS the switch to the
updated population numbers leads to only minor changes in the poverty igures (table 1).
21. The food poverty lines from 1976 until 1990 are based on the food energy intake method.
These lines are derived by multiplying an average kilocalorie price by 2,100. As explained
in more detail by Sutanto and Avenzora (1999), BPS applied several intermediary steps
before this average calorie price was obtained. One of these intermediary steps involved
the adjustment of the entire expenditure per capita distribution using the correction factors
for calories consumed outside of the home.
22. The nine remaining provinces were Bengkulu, Central Kalimantan, Central Sulawesi,
East Kalimantan, East Timor (now the nation of East Timor), Irian Jaya (now Papua and
West Papua), Jambi, Maluku, and Southeast Sulawesi. Only since 1993 has BPS derived
rural and urban poverty lines for each province.
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1993
In 1993 BPS made several important changes to the way it calculated oficial poverty igures. It abandoned the food energy intake method and introduced explicit
food baskets whose compositions could differ in rural and urban areas and across
provinces (as could item-speciic prices). In order to derive these baskets, BPS
looked at the expenditure patterns of the reference population.23 It also stopped
taking food eaten out into account when deriving the food poverty lines (Sutanto
and Avenzora 1999) and revised the way it derived the non-food poverty line. Up
to this point, BPS had obtained its non-food poverty line by specifying a non-food
basket that included 14 items in urban areas and 12 items in rural areas, determined by expert judgment and not survey data (at least not explicitly). In 1993
BPS changed this practice, conducting for the irst time its Survey on the BasicNeeds Commodity Basket (Survei Paket Komoditi Kebutuhan Dasar [SPKKD]),
on which it based its non-food basket from 1993 onwards. The 1993 SPKKD interviewed 800 households in 10 provinces (8 outside of Java), whereby the sample
underlying the SPKKD was exclusively the reference population. Compared with
Susenas, the SPKKD includes more detailed questions on non-food consumption;
BPS stresses that the SPKKD questionnaire tries especially to capture items consumed by the poor and the near-poor (Sutanto and Avenzora 1999).
In the 1993 SPKKD, BPS increased the number of items in its non-food basket to
25 in urban areas and 24 in rural areas. To derive the rupiah value of the non-food
poverty line, BPS used the SPKKD to calculate the subgroup expenditure share
of the respective items. It then multiplied all of the obtained subgroup expenditure share values from the SPKKD with the corresponding subgroup expenditure
amount in rupiah, as recorded in Susenas. The inal non-food poverty line, then,
was the sum of all 25 (24) obtained rupiah values.24 Given that the 1993 SPKKD
23. In its 1976–1990 estimates, BPS used the reference population only to ind the average
calorie price (food poverty line). Since 1993 it has used the reference population to determine the prices for the food poverty line, derive the non-food poverty line, and create
sampling frames for the SPKKD. Some circularity is involved in selecting the reference
population: the rupiah value of the poverty line depends on a reference group whose being
deined as such depends on the rupiah value of the poverty line. Pradhan et al. (2000, 2001)
discuss iterative methods of addressing this problem. BPS has taken a very practical approach by simply inlating by the consumer price index the poverty lines of the preceding
round. It then uses this inlation-adjusted poverty lines to select the reference population.
Since its 1984 poverty report, BPS has always selected a reference population with wealth
levels above the poverty line, which differs from the recommendations of many academics—such as Ravallion (1998)—who propose selecting a group of households whose wealth
levels are around or just below the poverty line.
24. To better understand how BPS handles the SPKKD in combination with Susenas, let us
assume that BPS has decided (based on SPKKD data) that three pieces of soap should be
included in the non-food basket, and that soap belongs to the toiletries subgroup. Let us
also assume that the expenditure on three pieces of soap constitutes 20% of all toiletries
expenditures of the reference group, as recorded in the SPKKD. In the next step, BPS
multiplies this 20% value by the recorded expenditure amount in rupiah of the toiletries
subgroup, as recorded in Susenas. Let us then assume that data from Susenas showed that
the reference population spends about Rp 100,000 on toiletries each month. Accordingly,
0.2 × Rp 100,000 = Rp 20,000 is the amount that enters the non-food poverty line. BPS applies this method to all selected non-food items.
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contained only a relatively small sample, it distinguished between rural and
urban areas but did not calculate province-speciic expenditure shares.
1996
For its 1996 poverty estimates, BPS relied largely on its 1993 approach. It made
two important adjustments, however. It again revised its selection of items and
quantities in the food basket underlying the food poverty line, although it left the
number of chosen items unchanged at 52. It also extensively revised its method of
calculating the non-food poverty line. Where its 1993 estimates were based on the
1993 SPKKD, its 1996 estimates were based on the 1995 SPKKD, which resulted in
new and very different (sub)group expenditure shares. The 1995 SPKKD included
interviews with 5,000 households and covered all provinces, which allowed BPS
to change its 1993 approach and to calculate province-speciic subgroup expenditure share values for urban and rural areas (Sutanto and Avenzora 1999).
1998–99
In 1999 BPS announced that it was changing the way it calculates poverty and that
its new approach would lead to higher reported poverty rates than previously. To
demonstrate, it published two estimates for 1999—one based on the old method
and one on the new method. It also corrected its 1996 estimate (based on the 1999
method), which became the oficial 1996 estimate in Statistik Indonesia: Statistical
Yearbook of Indonesia from 1999 onwards.
In terms of methodological changes in its 1998–99 poverty estimates, BPS
changed the composition of its food basket and, as stated in Sutanto and Avenzora
(1999), switched to more expensive food items (the number of items remained
unaltered at 52). BPS chose a similar approach for its non-food poverty line, deciding to reanalyse the 1995 SPKKD and selecting more expensive non-food items.
It also increased the number of non-food items in the non-food basket, from 25 in
urban areas and 24 in rural areas to 27 in urban areas and 26 in rural areas. These
compositional changes saw the overall poverty line(s) rise, on the back of a large
increase in the non-food poverty line.
2000
In 2000 BPS adopted two major changes. First, it changed its deinition of the
reference population that it used to determine the food basket (items, quantities, prices) and the non-food basket (prices, sampling for the SPKKD). During
1976–99 BPS divided the reference population into per capita expenditure brackets in rupiah values, whereas from 2000 onwards it deined the reference population as the 20% who live above the poverty line.25 Second, BPS decided to use
the Susenas core for the irst time, in order to be able to publish oficial poverty
estimates each year. Given that the 2000 Susenas did not include a consumption
expenditure module, BPS’s decision involved making important adjustments to
25. It is reasonable to assume that the determination of the upper limit(s) of the rupiah
value that determines the reference population (the lower value is given by the poverty
line[s] for the 1976–99 estimates) was based on BPS having a certain share or number of
the population in mind. Therefore, the change in the deinition of the reference population
might have had only limited consequences in practice.
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its 1998–99 methodology. BPS derived its 2000 poverty lines by updating the 1999
rural and urban provincial poverty lines using the consumer price index (CPI);
a practice that BPS continued in 200126. Since the 2000 and 2001 estimates rely
on the Susenas core (which BPS assumed to under-report consumption expenditures), BPS reduced the value of the poverty lines by 10% to account for the lower
consumption igures (Ritonga and Avenzora 2002).27
2002
In 2002, in line with BPS’s thematic three-year cycle, a Susenas module collected
consumption expenditure information. BPS used the data to calculate itemspeciic prices, to revalue the food and non-food baskets, and to derive the consumption aggregate that is used in its poverty measurement. The 2002 poverty
estimate therefore largely follows the 1998–99 approach.28
2003
According to BPS’s thematic three-year cycle, the 2003 Susenas would not collect
consumption expenditure information. Yet BPS deviated from this practice by distributing a ‘Consumption expenditure module’ questionnaire to a small sample
of 10,000 households (out of 260,000 households in the February 2003 round). BPS
used the ensuing price data (module) to derive a irst set of rural and urban province-speciic poverty lines (step one). It then used these poverty lines to derive
national (rural, urban, and overall) poverty estimates (step two). However, BPS
considered the sample size of 10,000 households to be too small on which to base
its provincial poverty rates. In a third step BPS used data from the Susenas core to
derive poverty rates (rural, urban, and overall) by province whereby it adjusted
its initial province-speciic poverty lines obtained under step one by the same
scaling factor, so that summing the number of poor people by province would
produce the same national poverty igures as those obtained under step two.
Thus, for 2003 BPS implemented a top-down approach, whereby the provincial
poverty igures were determined partly by the national poverty estimates.
26. Since Indonesia’s CPI is based on urban areas only, BPS had to assume that prices
between rural and urban areas increased by the same amount. Likewise, since the CPI captures price developments that do not necessarily represent the consumption basket of the
reference population, BPS had to assume that these differences were negligible.
27. As shown by Pradhan (2009), the under-reporting of consumption in the Susenas core
section compared with that in the modules is more prevalent among the poor than the
non-poor. It is therefore questionable whether poverty estimates based on the modules are
comparable with those based on the core.
28. In this article, all information on changes during 2002–13 is based on various BPS
sources, including the annual rounds of Statistik Indonesia: Statistical Yearbook of Indonesia
and Data dan informasi kemiskinan (Poverty information and data); Analisis dan penghitungan
tingkat kemiskinan (Analysis and calculation of the poverty rate) for 2005, 2008, 2009, 2010,
and 2011; the (bi-)annual rounds of Tingkat kemiskinan di Indonesia (The level of poverty
in Indonesia) since 2006; and BPS’s (2010) report. Certain information described in this
article is not tabulated in these publications but draws on discussions with BPS representatives.
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2004
In 2004 BPS continued its 2003 approach by administering the ‘Consumption
expenditure module’ questionnaire to 10,000 households (out of 260,000 households in the February 2004 round). Similar to 2003, BPS used a top-down approach
to calibrate its provincial poverty igures to match the national poverty igures.
In addition, BPS adjusted the food basket that determined the food poverty line.
While the overall number of selected food items remained at 52, BPS adjusted the
type and relative weight of some of the selected items.
2005
For the February 2005 round of the Susenas BPS decided to survey only 10,000
households, all of which were asked to complete the consumption expenditure
module. As in 2003 and 2004, BPS determined the national (rural, urban, and
overall) poverty rates based on the February round. For its provincial poverty
estimates in 2005, BPS relied on the July round of Susenas, which in its module
collected consumption information on about 68,000 households (out of 256,000
households). BPS again used a top-down approach, though in 2005 it calibrated
the provincial poverty igures from July to match the national estimates from
February. Furthermore, in 2005 BPS substantially altered the composition of the
non-food basket. In 2004 BPS had conducted a new round of the SPKKD, which
covered 1,050 households across all provinces. In 2005 these estimates entered
BPS’s poverty calculations for the irst time.
2006
In 2006 BPS followed its approach of 2005 by conducting only a small Susenas
round in the irst quarter of the year (March 2