REDUCING POVERTY THROUGH SUBSIDIES: SIMULATION OF FUEL SUBSIDY DIVERSION TO NON-FOOD CROPS

Authors

Indra Maipita
Wawan Hermawan
Fitrawaty Fitrawaty

Document Type

Article

Abstract

This paper analyzes the impact of fuel subsidy diversion to Non-Food Crops sector on income levels, using AGEFIS; a Computable General Equilibrium model. Then we proceed to apply the Foster-Greer-Thorbecke (FGT) index to measure the indicators of poverty (head count index, poverty gap index and poverty severity index). The simulation result shows the fuel subsidy diversion to Non-Food Crops sector provides a positive impact on increasing household incomes and poverty reduction. Furthermore, the fuel subsidy diversion to Non-Food Crops sector reduces the poverty of rural household, larger than the urban households.

Recommended Citation

Maipita, Indra; Hermawan, Wawan; and Fitrawaty, Fitrawaty (2012) "REDUCING POVERTY THROUGH SUBSIDIES: SIMULATION OF FUEL SUBSIDY DIVERSION TO NON-FOOD CROPS," Bulletin of Monetary Economics and Banking: Vol. 14: No. 4, Article 8.
DOI: https://doi.org/10.21098/bemp.v14i4.364
Available at: https://bulletin.bmeb-bi.org/bmeb/vol14/iss4/8

First Page

369

Last Page

388

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Indonesia

Affiliation

University of Medan