How to Ease the Burden of Poor Household ? : The Role of Raskin … · 2016. 2. 11. · Keywords:...

Working Paper in Economics and BusinessVolume V No.1/2015

How to Ease the Burden of Poor Household ? : The Role of Raskin Program

Sartika Djamaluddin

March 2015

Department of Economics, Faculty of Economics and BusinessUniversitas Indonesia

Working Paper in Economics and BusinessChief Editor: Hera SusantiEditors: Muhammad Halley Yudhistira, Rus’an NasrudinSetting: Rini Budiastuti, Moslem Afrizal

Copyright c©2015, Department of EconomicsDepartment of Economics Building 2nd FloorDepokWest Java, Indonesia 16424Telp. 021-78886252Email: [email protected]: http://econ.fe.ui.ac.id/workingpage

http://econ.fe.ui.ac.id/workingpage

Contents

Contents 3

List of Tables 4

List of Figures 4

1 Introduction 1

2 Rice for the Poor (Raskin) Program 2

3 In-kind Transfer and their effect on household expenditure 4

4 Method 6

5 Result 7

6 Conlusion 11

7 References 12

List of Tables

1 Budget for the Program of Social Protection Acceleration & Expansion (P4S) andSpecial Compensation Program Year 2013 . . . . . . . . . . . . . . . . . . . . . . . 3

2 Total Raskin Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Result of estimation using the model of households’ rice expenditures . . . . . . . . 104 Result of Estimation using the model of households’ expenditures . . . . . . . . . . 12

List of Figures

1 Budget Allocation for the Rice for the Poor Program 2008 - 2014 . . . . . . . . . . 32 Total poor households and targeted households . . . . . . . . . . . . . . . . . . . . 43 Percentage of realized raskin to the raskin ceiling . . . . . . . . . . . . . . . . . . . 54 Households’ rice Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Distribution of Raskin Beneficiaries in Indonesia, 2010 . . . . . . . . . . . . . . . . 76 Composition of poor household food expenditure . . . . . . . . . . . . . . . . . . . 87 Percentage of total expenditure Expenditure Raskin rice for poor households . . . 9

How to ease the burden of poor household ? : The Role of Raskin Program

Sartika Djamaluddina

aUniversity of Indonesia

Abstract

The aims of this study is to investigate whether Raskin program can ease the burden of riceexpenditure of poor household. The investigation are based on expenditure analysis. This researchuses the National Socio-Economic Survey (Susenas) data on households with 15,852 observations.Regression in all region indicates that Raskin program are significant to ease the burden of riceexpenditure but the effect is relatively small. In the regions where the percentage Raskin was lowerthan rice expenditure, Raskin expenditure can ease the burden of rice expenditure but the efeectis very small so we did not found significant evidence. Nevertheless in the province of Maluku,Papua and Papua barat, where the percentage Raskin was higher than the rice expenditure,the role of Raskin actually increase rice spending. However, the effect is relatively small so thatthere the effect is not significant. In addition, the Raskin program also consequently causesthe households’ total expenditures to increase. One of such causes is increased expenditures forfoodstuffs containing meat and non-meat, and fruits.

JEL Classifications: H30, H53, H55

Keywords: raskin program, in-kind transfer, household, consumption

1. Introduction

Indonesia is the country with high riceconsumption in the world. 95percent of thepopulation consume rice as their main sta-ple food with the rice consumption of 113.7kg/capita/year on average (BPS, 2011). Thisconsumption level is much higher than theworld’s average consumption level of only 60kg/capita/year. This indicates that rice has be-come the national very strategic commodity.

Rice for the poor program (Raskin) is thepolicy of providing food subsidy in the form ofsale of rice to the targeted households (RTS)at a price affordable to low-income communitymembers. The birth of the rice subsidy pro-gram for poor community members (Raskin)in Indonesia is inseparable from the monetaryand food crisis hitting the nation in 1997-1998.

This crisis caused increased difficulty for poorhouseholds in meeting their needs for staplefoods, especially rice. Through the Raskin pro-gram, the government provides access to food,physically or economically to poor households.At the price lower than the market price, poorhouseholds enjoy over 70 percent rice subsidy.This program is expected to fulfill 39.5 percentof poor households’ needs for rice.

Most of the poor households’ expendituresare spent for food consumption. This is re-flected from the role of food commodity to thePoverty Line which is better than the role ofnon-food commodities (housing, clothing, edu-cation and health). The contribution of poorfood to the Poverty Line is around 73 percent.The food commodities that have significant in-fluence on the value of poverty line are among

1

Djamaluddin, S./How to ease the burden of poor household ?... 2

others rice, cigarettes, broiler chicken eggs, in-stant noodle, cane sugar, tempe (soybean cake)and shallot. Among those commodities, rice isthe foodstuffs most purchased by households.BPS records around 29 percent of the expendi-tures for food are allocated to buy rice.

Thus far, the studies carried out related tothe Raskin program still concentrate on evalua-tion of the raskin related to its implementationprocess (Hastuti, et al, 2012; North SumatraProvincial BPP, 2011; Unggul et al, Panjaya,2011; Bafita and Sujianto, 2013). These stud-ies generally found a number of weaknesses inthe program organization, ranging from inac-curate beneficiaries, selling price beyond theprovision, inaccurate total rice for poor house-holds, poor rice quality, complicated adminis-tration to inaccurate distribution.

In particular, as incorporated in the GeneralGuidelines on Raskin, the purpose of Raskin isto ease the expenditures of the targeted house-holds (the poor) through fulfillment of someof their needs for rice. The weaknesses of theprogram organization cause fear of failure toreach the expected program purpose. To thisday there have yet been studies undertaken toanalyze the influence of Raskin on the expen-ditures of poor households. Sasongko (2009)conducted a study to see the causal relationbetween the Raskin program and households’consumption. However, this study has yet toexamine whether the Raskin has or not suc-cessfully eased the households’ burden.

The study has the purpose to examine theachievement of the objective of the Raskin pro-gram through the benefits earned by house-holds from the program. In particular, thequestions to be addressed in this research are:

1. Is the Raskin program able to ease the ex-penditures of households for rice? Lots ofstudies that report non-optimum organi-zation of the Raskin program in severalregions leave us to predict that the Raskinprogram can lower the need for rice, de-spite its relatively insignificant impact.

2. Compared to the impact of income, whichaid can ease the households’ expendituresfor rice, the Raskin aid or the aid thathas the nature to augment income (cashtransfer)? Income has the flexibility to beallocated to meet all kinds of households’needs, while the Raskin aid is in particularintended to meet the need for rice. There-fore, our hypothesis is that the Raskin canbetter ease the poor households’ expendi-tures than the policies that augment in-comes.

3. What is the impact of Raskin to the house-holds’ total expenditures? As it has thenature of special, small and limited inamount, we predict the impact of raskin tothe households’ total expenditures is low.

The study covers all provinces in Indonesia us-ing the susenas data 2010. This writing con-sists of several parts namely research questions,literature studies related to evaluation on theRaskin program, research methodology, resultand conclusion.

2. Rice for the Poor (Raskin) Program

The program of Rice Subsidy for Low-incomeCommunity Members (Raskin) is a food sub-sidy intended for poor and vulnerable house-holds as an effort by the government to enhancefood resilience and provide social protection topoor and vulnerable households. The RaskinProgram is a Program for Eradicating Povertythat is included in Cluster 1 of the Social Pro-tection Program.

The Raskin Program has the purpose to easethe expenditures of the Targeted Households(RTS) through fulfillment of parts of their needfor staple food in the form of rice and preventdecrease of energy consumption. Through theRaskin program, the government provides aidin the form of rice to poor households. Thechanneled Raskin is not free of charge. TheRaskin must still be bought but at low price.


Source: The Coordinating Ministry for People’s Welfare.

Figure 1: Budget Allocation for the Rice for the Poor Program 2008 - 2014

The Raskin program provides rice aid in theamount of 15 kg/month to poor households.Rice is sold at low price (below the marketprice) namely Rp 1,600/kg.

Table 1: Budget for the Program of Social ProtectionAcceleration & Expansion (P4S) and Special

Compensation Program Year 2013

Type of Aid Jumlah (Trilyun)

Cash Transfer 27,324BSM 12,076BLSM 11,648PKH 3,6In-kind Transfer 27,497Raskin 21,497P4-IP 2P4-SPAM 2P4-ISDA 2

Total 54,821

Source: Handbook on Dissemination and

Implementation of Compensation

Program, the policy for adjusting

the subsidy of fuel oil 2013,

processed

The Raskin budget is one of the componentsin the budget of Social Protection Acceleration& Expansion Program (P4S) and the SpecialCompensation Program which in year 2013 isallocated at 54.821 trillion. 89 percent of thetotal budget is household-based social aid such

as the Raskin, Aid for Poor Students (BSM),Family of Hope Program (PKH), and PublicHealth Security (Jamkesmas). Only Rp 6 tri-lyun are distributed for 3 infrastructure pro-gram that is Accelaration and Expansion ofhousing infrastructure program (P4-IP), Acce-laration and Expansion of water resources in-frastructure program (P4-ISDA), Accelarationand Expansion of social security program (P4-IP) and Accelaration and Expansion of watersupply system program (P4-ISDA).

In channeling the aids, the government ap-parently prefers non-cash form (in-kind). Table1 indicates that compared to other social aidprograms, non-cash aids (in-kind) in the formof Raskin program has the largest allocationnamely 21.497 trillion or over 39 percent of thetotal budget.

The allocation of the budget for Raskin con-tinues to increase from year to year. Figure 1indicates that the budget for Raskin in year2014 reaches almost 19 trillion which means anincrease by 1.6 times from the budget for year2008. On average, the budget for the Raskinprogram per year is over 15 trillion or around1 percent of the government’s averaged expen-ditures.

By virtue of Law No. 23 Year 2013 regard-ing State Budget and Expenditures Fiscal Year2014, the fund for Raskin year 2014 is takenfrom the central government budget and re-gional budget. The central government budget


Source: The Coordinating Ministry for People’s Welfare

Figure 2: Total poor households and targeted households

is used for procurement and distribution of riceup to distribution points, while regional budgetis used to distribute Raskin from distributionpoints to the targeted households (poor house-holds).

The budget provided by the region is uti-lized to finance the operational cost, Raskintransportation cost from Distribution point toallocation point up to RTS-PM, subsidy forthe Raskin redemption price, Raskin bridgingfund, additional allocation for Raskin to RTS-PM outside the stipulated ceiling or additionalallocation for Raskin for RTS-PM in the stip-ulated ceiling.

The beneficiaries of the Raskin program con-tinue to increase each year. The Governmentendeavors that all poor households can be thetargeted households in the program. Figure 2indicates that in the period of 2002 - 2007 thegovernment could not subsidy all poor house-holds. During the period the total number ofhouseholds that were the targets in the Raskinprogram was lower than the poor households.In 2002, only 52.56 percent of poor householdswere the targeted households. Since year 2008all poor households were the targets in theprogram. This means that the government hasbeen able to subsidy all poor households.

Determination of the targeted households forthe program is sometimes difficult to do. Eventhough the government has targeted the totalof targeted households, the mechanism to de-

termine in the field is often not congruent. De-termination of poor households in the field isperformed through deliberation process at vil-lage and sub district levels. The decision in thedeliberation sometimes overestimates or under-estimates the total number of Raskin beneficia-ries. Figure 3 shows realized Raskin distribu-tion during the period of 2005-2012. The re-alization is seen sometimes lower (underesti-mate) or higher (overestimate) than the stip-ulated ceiling. During the period of 2007 upto 2010 the realized raskin slightly decreasednamely around 2 percent. However, in years2011 and 2012 the raskin realization exceededthe stipulated ceiling.

3. In-kind Transfer and their effect onhousehold expenditure

The aid from the government to poor house-holds can be in the form of cash aid or non cash(in-kind). In-kind transfer can be in the formof food, health, housing, health services and soforth. In-kind transfer plays an important rolein the policy on poverty. First, the policy of in-kind transfer plays an important role in the dis-tributive policy. The Government can ensurethat the subsidized goods or services can be im-mediately consumed by poor households. Sec-ond, the policy of in-kind transfer can reduceor avoid occurrence of welfare fraud. It is oftenfound people pretending to be poor in order tobenefit from the aid. By providing goods that


Source: The Coordinating Ministry for People’s Welfare

Figure 3: Percentage of realized raskin to the raskin ceiling

are the main need for poor households and dis-liked by well-off households, inaccuracy in thedetermination of targets for distribution can beavoided.

Third, the government can control the poorhouseholds’ expenditures pattern. Poor house-holds can buy goods that they really need notother (luxury) goods. Fourth, the governmentcan control inflation. Giving out money can in-crease demand for goods and encourage infla-tion. Fifth, the policy of in-kind transfer wouldnot only help poor households but also theproducers of the transferred commodity. TheRaskin Program can boost demand for rice andbenefit rice producers.

What is the impact of policy of in-kind trans-fer on households’ expenditures? The follow-ing is the explanation. Suppose that a house-hold with income, I, consumes 2 kinds of goodsnamely rice (R) and other goods (L). The riceprice is PB and the price of other goods is PL.The utility function of the household becomes:U(R,L). The function of the household’s bud-get: Io = R.PR + L.PL. The budget line of thehousehold is AF.

The rice aid to households is illustrated asshift of budget curve to the distance of AB. Ifthe aid is given free of charge to poor house-holds the budget curve faced is ABE. The totalrice that can be bought is maximum until pointD.

However, if the price of rice aid is lower than

the market price such as in the Raskin pro-gram, the budget curve faced by householdsis ABD. The total rice that can be boughtis maximum until point E. The ABC trian-gle area is the consumption area that is ob-tained not under the policy of in-kind trans-fer. Change in households’ consumption occursbecause lower prices have substitution and in-come effects. If the substitution effect is higherthan the income effect, the rice consumptionincreases compared to other goods, causing theutility of poor households increases from U1 toUo. The total rice consumed increases from Ro

to R1.

There are no as yet studies carried out inIndonesia analyzing the extent of impact ofthe in-kind transfer policy on the consump-tion of poor households in Indonesia. Similarstudies have been carried out by many in theUS related to the program of in-kind transferfrom the government such as food aids (foodstamp), housing, health et cetera. As predictedin the theory, the in-kind transfer policy hasthe impact to lower households’ expendituresrelated to subsidized goods and increase thehouseholds’ expenditures as a whole. Study byHoynes and Schanzenbach (2009) establishesthat food stamp from the government causes adecrease in the households’ expenditures whilethe total expenditures for food increase. Ninnoand Dorosh (2002) compared the impact of in-kind transfer and cash transfer. The result of


Figure 4: Households’ rice Consumption

study indicates that the impact of wheat trans-fer on increased consumption of wheat is higherthan the impact of cash transfer (income).

Study by Slesnick (1996) explains that thepolicy of in-kind transfer significantly help poorhouseholds. However, the capacity of the saidpolicy depends on the accuracy of the targetedhouseholds and how they assess the aid. Largein-kind transfer to poor households in the formof food, housing, and consumer services is aneffective means to help out poor households.

4. Method

The data used is the susenas data 2010 con-sisting of 15,852 households receiving raskin.As the Raskin program is the program intendedfor poor households, all households receivingraskin should be poor households. However,several studies prove that in several cases thereare oftentimes leaks in the Raskin distribution.Therefore, identification process is needed toascertain whether all Raskin beneficiaries arepoor households. We use the poverty line to de-termine whether a household receiving Raskinis poor or not. The households receiving Raskinwhich incomes (estimated from the total ex-penditures) per capita is under the poverty lineis categorized as poor households and becomethe samples to be analyzed. The data used inthis study is the susenas data year 2010.

The empirical model used is as follows:

lnR = ao + a1lnI + a3lnRaskin + a4X + D

+ ei (1)

lnExpi = bo + b1lnRaskin + b3X + D + ei (2)

Equation 5.1 is the model on the households’expenditures for rice. Variable ln R is the nat-ural logarithm of rice expenditures. Variable lnR reflects the amount of the households’ expen-ditures for rice in the last one week (in rupiah).In I is the natural logarithm of income. Incomeis estimated from the total expenditures afterexpenditures for raskin. Variable lnRaskin isthe natural logarithm of raskin expenditures.Raskin expenditure is calculated by multiply-ing the total raskin bought at the raskin sellingprice. Equation 5.2 is the model of households’expenditures. Variable ln EXP is the naturallogarithm of the type of households’ expendi-tures. i denotes the type of food expenditures.

X Variable is the control variable that de-scribes the household’s characteristics namelysex, age, classification of residential area (ur-ban or rural), total number of household mem-bers, education, and credit program from thegovernment. D is the dummy variable for theregion. Dummy variables are divided into 4namely Java, Sumatera, Kalimantan, and Su-lawesi. a1 is the elasticity of demand for rice tothe income. If income augmentation causes anincrease to rice expenditures, the rice is clas-


Source: Susenas 2010, processed

Figure 5: Distribution of Raskin Beneficiaries in Indonesia, 2010

sified as a normal commodity. Whereas, if itis negative, the rice is categorized as inferiorgoods.

5. Result

a. Who is the beneficiaries?The majority of Raskin beneficiaries aremale (84.2 percent) and generally livein rural areas (68.8 percent). The edu-cation level of most Raskin beneficiaries(83 percent) is relatively low. They gen-erally attended primary education (pri-mary/secondary). These households have4 up to 5 members on average. The poorhouseholds receiving Raskin generally donot receive business credit from the gov-ernment or other agencies, and only 11percent of which receives business credit.

Table 2 indicates that there are still house-holds categorized poor out of 31 millionRaskin beneficiaries based on the povertyline in provinces. 3.4 million (11 percent)are classified as poor households, and theremaining 89 percent are not poor house-holds. The proportion of poor householdscan still change depending on the criteriaof poverty used. The more the number andthe stricter the poverty criteria the less thenumber of households categorized as poor.This means that the potency of not poor

households to enter the category of pooris higher.

Distribution of the Raskin beneficiariesare concentrated in Java island especiallyin regions where the total poor populationis high namely in East Java Province, Cen-tral java and West Java. The percentage ofRaskin beneficiaries in East Java reaches29 percent, Central Java 20.2 percent andWest Java 19.5 percent. Raskin beneficia-ries in east province such as Kalimantan,Sulawesi, Maluku and Papua are very lowthat is less than 1 percent.

b. The pattern of poor household expendi-tureFigure 5 shows that the rice is still a ma-jor food consumption of poor households.Data show that 46 percent of food expen-diture allocated to buy rice. Expenditureof rice in the province of North Sumatrahighest compared across provinces. How-ever specialized in Jakarta food expendi-ture much higher than the expenditure ofrice. Whereas in other areas so food ex-penditure is relatively low.

In general, the average expenditure offood containing animal protein by 24 per-cent. Consumption of fish, meat, eggs andmilk in Bangka Belitung, Riau Islands andProvince in Kalimantan and the relatively


Table 2: Total Raskin Beneficiaries

Beneficiaries Amount percent

Poor 3.412.759 11Non Poor 27.672.968 89

Total 31.085.726 100

Source: Susenas 2010, processed

Source: Susenas, processed

Figure 6: Composition of poor household food expenditure

high compared to other regions. As for ex-penditure of vegetable and fruits are rel-atively low in all regions with an averageof 17 percent and 3 percent of total foodexpenditure

Rice consumption of poor householdsvaries between regions. This is shown bythe difference between the amount of ex-penditures rice area. The average expendi-ture of poor households rice Raskin recip-ients of Rp 50 thousand per month. riceExpenditure in North Sumatra provinceis high that is more than USD 75,000 amonth. While the expenditure of rice inthe province of Maluku, North Maluku,Papua and Papua barat are low.

Raskin average expenditure varies be-tween regions and generally far belowthe needs of rice needs. Raskin expendi-ture in Java is relatively lower than otherprovinces. Raskin expenditure in Java justless than USD 14,000. While on the island

of Sumatra, Nusa Tenggara, Kalimantanare relatively high that is more than USD35,000. Raskin expenditure is highest inthe Maluku and Papua, the average of itreached Rp 46,000. Figure 6 shows thatRaskin role in meeting the needs house-hold is still relatively low. In most ar-eas Raskin meet 36.5 percent of householdneed. In some areas reached more than 66percent (Riau, South Sumatra, Riau, EastNusa Tenggara, West Kalimantan, Cen-tral Kalimantan, East Kalimantan). In theeastern region, Maluku Province, Raskincan fulfill more than 90 percent of house-hold need. However, there are irregular-ities in the province of Maluku Utara,Papua and Papua Barat. The number ofRaskin beneficiaries are relatively low (lessthan 1 percent) but Raskin expenditureare higher than their rice expenditure. per-centage of Raskin Expenditure to rice ex-penditure are 153 percent.

According to the Raskin program, ev-



Figure 7: Percentage of total expenditure Expenditure Raskin rice for poor households

ery household gets Raskin as much as15 kg per household at Rp 1600 perkg. It means that the Raskin expendi-ture amount are only 24,000 per house-hold. However Raskin expenditure gen-erally exceed that number. The reasonsare, first, the average Raskin purchasedby poor households exceeds the definedterms. There are more than 90 percent ofthe area where Raskin sold more than 15kg per household. Second, the selling priceof Raskin in most areas is higher than Rp1600. There are 33 percent area that sellRaskin above USD 1600 per kg and morethan 63 percent sold Raskin are less thanregulatory price.

c. The effect of Raskin and Income to expen-ditures for riceThe result of estimation indicates signifi-cant evidence on the existence of influenceof Raskin on rice expenditures. The RaskinProgram is effective in reducing the riceexpenditures of poor households. House-holds substitute their rice with cheaperpoor rice. Hence the money they spent(out of pocket) for rice lessens. Table 4 in-dicates that increase in raskin expenditureby 1 percent will lower the expendituresfor rice by 0.026 percent. If the regionalcharacteristic is included, the expenditurefor rice will lower even higher namely by0.03 percent.

Table 4 shows that increased income has

significant impact on increased expendi-ture for rice. In this case rice is a normalcommodity. Every increase of income by1 percent causes 0.67 percent increase inthe poor households’ expenditure for rice.However, the influence of income to ex-penditure for rice decreases if the modelintroduces the influence of regional char-acteristics. The elasticity value of rice ofbelow 1 percent indicates that the rice isnormal commodity and is the main com-modity consumed by poor households.

Comparing the influence of expendituresfor Raskin and income on the expendituresfor rice is similar to comparing the influ-ence of aids in the form of non cash trans-fer (in-kind) and cash transfer. Grantingof cash transfer causes an increase to thehousehold income. The Household buysrice at the market price hence the burdenof rice expenditures increases. Unlike in-kind transfer namely poor rice where theburden of rice expenditures decreases be-cause the household buys it at the subsidyprice (lower than the market price).

By including the regional characteristicinto the model, it is found that rice ex-penditures in Java, Sumatera and Sulawesiislands are relatively higher than in otherregions. The influence of regional charac-teristic on rice expenditures is consistentlysignificant in the three models, except forsex, and age which are not significantly


Table 3: Result of estimation using the model of households’ rice expenditures

Variabel Model 1 Model 2 Model 3 Model 4

Income 0,673** 0,647** 0,709** 0,249**Raskin expenditure -0,026** -0,031** -0,0009 0,034Gender -0,017 -0,011 -0,0135 0,008City -0,121** -0,118** -0,130** -0,054Age 0 0 -0,000 0,0045**Basic education 0,040** 0,033** 0,008 0,12**Number of family member 0,076** 0,081** 0,071** 0,11**Credit Loan -0,069** -0,062** -0,047** 0,058RegionalJawa 0,052**Sumatera 0,130**Kalimantan -0,080**Sulawesi 0,081**Constant 1,340** 1,658** 0,684**R squared 0,4906 0,4954 0,517 0,27observation 15.852 15.852 1463 1216

Model 1: all Model 3: w/o Maluku dan Papua

Model 2: all Model 4: khusus Maluku dan Papua

** alpha significance: 5 percent.


influenced. The households living in ruralareas are relatively higher in term of theirrice expenditures as compared to those liv-ing in urban areas. Meanwhile, male headsof households have lower expenditure forrice as compared to female heads. Therice consumption of households with higheducation level is relatively lower com-pared to those with lower education. Themore the total members of a household thehigher their rice consumption. Age is notproven to have significant influence, exceptin model 2. However, the influence is veryinsignificant as evident from its marginaleffect.

In regions where the percentage Raskinwas lower than rice expenditure, Raskinrole is very small so we didnt found sig-nificant evidence that Raskin can easethe burden on poor households (model

3). Significant variables and the largerole increasing rice expenditure is rev-enue. Household characteristics are sig-nificant regional classification, number ofhousehold members and credit assistance.Households who live in the city of rice ex-penditure lower than living in the village.The influence of age is directly propor-tional to the expenditure of rice. while theeffect of credit assistance actually reduceconsumption of rice

d. The effect of Raskin on the expendituresof poor householdsThe result of estimation in Table 5 column2 indicates that the Raskin program haspositive and significant influence on theexpenditures of households including thetotal expenditures. However the influenceis relatively low. If the expenditure forRaskin increases by 1 percent, the house-


hold’s total expenditure increases by 0,028percent, ceteris paribus. Why does the to-tal expenditure only slightly increase? Oneof the reasons is because the impact ofRaskin on expenditures for food is rela-tively low (column 3). 1 percent increasein the expenditures for Raskin will only in-crease the expenditures for food by 0.047percent, ceteris paribus.

For poor households, when the expendi-tures (consumption) for Raskin increasethe most important is to increase the con-sumption for foodstuffs that contain ani-mal proteins (fish, meat, eggs and milk)and fruits rather than the stuffs that con-tains plant proteins (vegetables and legu-minous plants). Columns 4 and 6 showsthat every increase by 1 percent in the riceexpenditures, the expenditures for fish,meat, eggs and milk will increase by 0.238percent and the expenditures for fruits by0.159 percent, ceteris paribus. This indi-cates that rice and foodstuffs that containanimal proteins are complementary. Con-suming both will give high utility for poorhouseholds. The same holds true for therelation between rice and fruits.

Table 4 column 5 shows that consump-tion of Raskin has negative relation toconsumption of vegetables and leguminousplants. If the expenditures for raskin in-crease by 1 percent, the consumption ofvegetables and leguminous plants will de-crease by 0.06 percent, ceteris paribus.However, the portion of declining con-sumption is relatively small. It can be saidthat for poor households, vegetables andleguminous plants are still the main food-stuff accompanying rice.

Sex has significant and positive influenceon the total expenditures and expendi-tures for food and expenditures for non-meat foods. Meanwhile there is sufficientevidence of the influence of residential areaon the expenditures. The households that

live in urban areas have higher total ex-penditures. However, the portion of expen-ditures of poor households in urban areasfor food is relatively lower than in ruralareas. The influence of the region is notevident on the expenditures for meat andnon-meat food and fruits.

The influence of age is proven to be pos-itively significant on all types of expendi-tures. The older the age of the household’shead the lower his expenditures, exceptthe expenditures for fruits that increas-ingly increase but in a very small amount(close to zero). The influence of credit aidis only significant in the household’s to-tal expenditures. The education level alsohas significant and positive influence onthe total expenditures and expendituresfor food. The total number of the house-hold’s members is also the variable thatplays an important role in increasing thehousehold’s expenditures including the ex-penditures for food, meat and non-meatfoodstuffs, except fruits.

6. Conlusion

The estimation results support the theorythat government aid can improve the welfareof poor households. However, the magnitudeof the marginal welfare is strongly influencedby their expenditure pattern. The influence ofRaskin to the consumption of poor householdscan be directly observed through the buyingpattern on rice and indirectly through the buy-ing pattern on other foodstuffs related to rice.The Raskin Program is proven to significantlyease the poor households’ expenditures for rice.Meanwhile, the provision of cash aid which hasan impact on increased income will instead in-crease the expenditures for raskin rice.

The raskin Program causes the total expen-ditures of households increased. The increasemainly stems from consumption of goods thatare complementary in nature to rice namely ex-


Table 4: Result of Estimation using the model of households’ expenditures

Independent VariableDependent variable

Total Food Animal Protein Plant Protein FruitsExpenditure Expenditure Expenditure Expenditure Expenditure

Raskin expenditure 0,028** 0,047** 0,238** -0,060** 0,159**Gender 0,065** 0,077** -0,122** 0,025 -0,029City 0,032** -0,023** 0,014 0,019 -0,036Age -0,002** -0,003** -0,006** 0,003** -0,000Basic Education 0,041** 0,031** 0,021 0,020 -0,015Number of family

0,194** 0,197** 0,230** 0,127** 0,118**memberCredit Loan 0,015** 0,000 -0,023 0,057 0,061Constant 12,382** 10,333** 6,402** 9,373** 6,270**

** alpha significance: 5 percent.

penditures for foods that contain animal pro-teins such as fish, meat, eggs and milk and ex-penditures for fruits. The influence of Raskinprogram on the expenditures for foods thatcontain plant proteins (vegetable and legumi-nous plants) is instead negative. However, theamount of decrease in the expenditure is rel-atively low (0.06) hence we can still say thatnon-meat foodstuffs are still complementary tothe rice.

In regions where the percentage Raskin waslower than rice expenditure, Raskin role is verysmall so we didnt found significant evidencethat Raskin can ease the burden on poor house-holds (model 3). Significant variables and thelarge role increasing rice expenditure is rev-enue. In regions where the percentage Raskinwas higher than the expenditure of rice (model4), the role Raskin rice actually increase spend-ing. However, the effect is relatively small sothat there is no significant evidence Raskinexpenditure rice can reduce spending. in theprovince of Maluku, Papua and Papua barat isprecisely the role of income is very low com-pared with other regions.

7. References

[1] Hastuti, Bambang Sulaksono dan Sulton Mawardi.(2012). Tinjauan Efektivitas pelaskanaan Raskindalam Mencapai Enam Tepat, Working paperSMERU

[2] Hoynes, Hillary W., and Diane WhitmoreSchanzenbach. (2009). Consumption Responses toIn-Kind Transfers: Evidence from the Introductionof the Food Stamp Program [American EconomicJournal: Applied Economics 2009, 1:4, 109-139]

[3] Ninno , Carlo del., and Paul A. Dorosh. (2002).In-kind transfers and household food consump-tion : Implication for targeted food program inBangladesh [FCN Discussion paper No. 134]

[4] Pedoman Umum Raskin 2014. , Kementrian Ko-ordinator Bidang Kesejahteraan Rakyat SelakuPenanggung Jawab Program Raskin

[5] Slesnick, Daniel T. (1996). Consumption andPoverty : How effective are in-kind transfer ? [TheEconomic Journal]

[6] Hyman, David N. (2008). Public Finance : A Con-temporary Application of Theory to Policy, 9th ed


Appendix

Regression Model 1

Regression Model 2


Regression Model 3

Regression Model 4

How to Ease the Burden of Poor Household ? : The Role of Raskin … · 2016. 2. 11. · Keywords:...

Documents

Transcript of How to Ease the Burden of Poor Household ? : The Role of Raskin … · 2016. 2. 11. · Keywords:...