Determinants of Poverty: Panel Data Analysis In ASEAN-5; 1990-2013
10 Pages Posted: 9 May 2016
Date Written: April 30, 2016
Poverty is a multi-faceted phenomenon which affects not only the ability to purchase goods, but also vulnerability towards various pressures that may prohibit an individual from enjoying life. This vulnerability may be gauged from living conditions such as employment, health, education, and housing. In short term, poverty can be concluded as one problem that really bothers every country around the world. Poverty is one of the issues being debated in the central and local governments in various regions including in ASEAN region. Since its establishment in 1967, ASEAN has been transforming in from five developing countries to a group consisting of 10 countries that are accounted in the international area. But still, they face the poverty problem up till now.
That’s why the analysis of determinants of poverty is essential for preparing strategies towards efficient intervention. This research aims to investigate the determinants of poverty in ASEAN-5. Indonesia, Thailand, Malaysia, Laos, and Vietnam are used as the object since the poverty rate in those five countries can be categorized as high since long time ago, and also the availability data of each country. Because for the rest of ASEAN countries, especially Myanmar and Cambodia, we still face lack of data that are publish freely in the internet. The variables used in this research consist of macroeconomics variables, such as inflation rate, the growth of gross domestic product, unemployment rate, and also social variables, such as total population and youth literacy rate. These variables are considered as the important factors that every country should have. And along with its development, ASEAN countries also have various condition about those factors. Also, it can be said that for some factors, there are some gap between the ASEAN countries.
Data used in this research is obtained from the World Bank Publication. The method used in this research is a quantitative method. By using panel data analysis and STATA 11 as the software, it is seen that generally, factors determine poverty rate in ASEAN-5 are the growth of GDP, inflation rate, unemployment rate, and youth illiteracy rate. Panel data or longitudinal data typically refer to data containing time series observations of a number of individuals. This research use the combination of time series and cross section, that’s why we can use the panel data analysis.
Future studies are still needed as a development of this study. We recommend to adding another factor that might be influence poverty, and if it is possible, to use all the ASEAN countries so that we can get broader depiction about the ASEAN countries.
Keywords: ASEAN, Illiteracy, Macroeconomics, Panel Data, Poverty Rate
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