Working Paper: NBER ID: w7194
Authors: James Levinsohn; Steven Berry; Jed Friedman
Abstract: The recent financial crisis in Indonesia has resulted in dramatic price increases. Using very recent data, we investigate whether these price increases have impacted the cost-of-living of poor households in a disproportionately harsh way. We find that the poor have indeed been hit hardest. Just how hard the poor have been hit, though, depends crucially on where the household lives, whether the household is in a rural or urban area, and just how the cost-of-living index is computed. What is clear is that the notion that the very poor are so poor as to be insulated from international shocks is simply wrong. Rather, in the Indonesian case, the very poor appear the most vulnerable.
Keywords: Indonesian economic crisis; price changes; poor; vulnerability
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Indonesian economic crisis (F65) | economic conditions faced by the poor (I32) |
| changes in the rupiah's value (F31) | heightened vulnerability for urban poor populations (I32) |
| price increases (E30) | heightened vulnerability for urban poor populations (I32) |
| Indonesian economic crisis (F65) | significant impacts on the poor (F63) |