Poverty Dynamics and Vulnerability Assessment in Java, Indonesia

The change of one’s poverty status across time is dynamic. This research was performed to review poverty dynamics and to construct vulnerability assessment using panel data taken from Social and Economic Survey which involved four stages. The first stage is to construct model of consumption expenditure using regression model with random effects approach. Second, estimates expected value, variance of consumption expenditure, and determine the poverty line. Third, calculate the probability of household poverty. Fourth, calculate the number of vulnerable households. The profile of a vulnerable household also reviewed there. The results shows that the characteristics of household poverty are: (i) poverty is rural household phenomenons which work at the primary sector, (ii) not poor households whose position is close to the poverty line are more vulnerable. Household and region characteristics, and shock experienced by households influence the household’s consumption expenditure. Vulnerability assessment resulted the percentage of vulnerable households in urban area in 2008, 2009, and 2010 are 8.2 percent, 10.9 percent, and 10.4 percent, while in rural areas are 30.4 percent, 46.1 percent, and 44 percent. These vulnerable households have big family size, low level education, weak economic resources, and experiencing inflation shock.