The Distributional Impacts of Indonesia's Financial Crisis on Household Welfare : A 'Rapid Response' Methodology

Levinsohn, James; Friedman, Jed

The Distributional Impacts of Indonesia's Financial Crisis on Household Welfare : A 'Rapid Response' Methodology

Autores

Levinsohn, James

Friedman, Jed

Editor

Washington, DC: World Bank

Descripción

Analyzing the distributional impacts of economic crises is an ever more pressing need. If policymakers are to intervene to help those most adversely affected, they need to identify those who have been hurt most and estimate the magnitude of the harm they have suffered. They must also respond in a timely manner. This article develops a simple methodology for measuring these effects and applies it to analyze the impact of the Indonesian economic crisis on household welfare. Using only pre-crisis household information, it estimates the compensating variation for Indonesian households following the 1997 Asian currency crisis and then explores the results with flexible nonparametric methods. It finds that virtually every household was severely affected, although the urban poor fared the worst. The ability of poor rural households to produce food mitigated the worst consequences of the high inflation. The distributional consequences are the same whether or not households are permitted to substitute toward relatively cheaper goods. Households with young children may have suffered disproportionately large adverse effects.

Palabras clave

AGGREGATE MEASURE, AGRICULTURAL INPUTS, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTS, AVERAGE PRICE, BASIC CONSUMPTION, BASIC NEEDS, BLOCK GRANTS, CALORIC INTAKES, CHRONICALLY POOR, COMMODITY PRICE, COMMODITY PRICES, COMMUNITY HEALTH, CONSUMER SURPLUS, CONSUMPTION AGGREGATE, CONSUMPTION DATA, CONSUMPTION INFORMATION, CONSUMPTION NEEDS, CONSUMPTION PATTERNS, CONSUMPTION SURVEYS, DATA SETS, DEMOGRAPHIC COMPOSITION, DROUGHT, DURABLE GOODS, ECONOMIC REVIEW, ECONOMIC SHOCKS, ELDERLY WOMEN, EMERGING MARKETS, EMPLOYMENT PROGRAMS, EXPENDITURE, EXPENDITURE DISTRIBUTION, EXPENDITURE FUNCTION, EXPENDITURE INFORMATION, EXPENDITURE LEVEL, EXPENDITURES, FIREWOOD, FOOD BUNDLE, FOOD CONSUMPTION, FOOD GOODS, FOOD NEEDS, FOOD PRICE, FOOD PRICES, GROSS DOMESTIC PRODUCT, HOUSEHOLD COMPOSITION, HOUSEHOLD CONSUMPTION, HOUSEHOLD CONSUMPTION SURVEY, HOUSEHOLD EXPENDITURE, HOUSEHOLD EXPENDITURES, HOUSEHOLD HEAD, HOUSEHOLD INCOME, HOUSEHOLD LEVEL, HOUSEHOLD MEMBERS, HOUSEHOLD SIZE, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, HOUSEHOLD WELFARE, HOUSEHOLDS WITH CHILDREN, HOUSING, IMPACT ON POVERTY, INCIDENCE OF POVERTY, INCOME DISTRIBUTION, INCOME LEVELS, INCOME SHOCKS, INEQUALITY, INFLATION, LABOR MARKETS, MARKET PRICES, MEAT, NONFOOD ITEMS, POLICY RESEARCH, POLITICAL ECONOMY, POOR, POOR HOUSEHOLDS, POOR RURAL HOUSEHOLDS, POORER HOUSEHOLDS, POVERTY COMPARISONS, POVERTY LEVELS, POVERTY LINE, POVERTY LINES, POVERTY MEASURE, POVERTY PROFILE, POVERTY RATES, PRICE CHANGE, PRICE CHANGES, PRICE INCREASE, PRICE INCREASES, PRICE INDICES, PRICE INFORMATION, PRICE LEVELS, PRICE POLICY, PRICING REFORMS, PUBLIC GOODS, REGIONAL ANALYSIS, REGIONAL PROFILE, REGIONAL VARIATION, RELATIVE PRICE, RELATIVE PRICES, REMOTE RURAL AREAS, RURAL, RURAL AREAS, RURAL HOUSEHOLD, RURAL POOR, RURAL POVERTY, RURAL POVERTY LINE, RURAL POVERTY LINES, RURAL PRICES, SAFETY NET, SAFETY NET PROGRAMS, SAFETY NETS, SHADOW PRICES, SOCIAL POLICIES, SPATIAL INEQUALITY, SPATIAL PATTERNS, SPATIAL VARIATION, SPREAD, STANDARD ERRORS, SUBSISTENCE, SUBSTITUTE, SUBSTITUTES, SUBSTITUTION, SURPLUS, TARGETING, URBAN AREAS, URBAN HOUSEHOLDS, URBAN POVERTY LINE, UTILITY LEVEL, VEGETABLES, WELFARE INDICATORS