Impacts of the Indonesian economic crisis: price changes and the poor

Did the recent financial crisis in Indonesia result in dramatic price increases? In the Indonesian case the very poor appear the most vulnerable. The results emphasize the importance of heterogeneity when measuring the impact of the Indonesian economic crisis on households

The authors find a substantial increase in the mean cost-of-living, on the order of 130 percent, if the relative benefits of self-produced agriculture and owned housing are disregarded. The measured increase is greater for poorer households and households in rural areas.

The results also illustrate the role that agricultural self-production and owned housing played in dampening the impact of the crisis

Of all households, the urban poor appear the most adversely impacted by the crisis. Their cost-of-living tended to rise the most and, being poor, these households are presumably among the least able to absorb these increases [author]

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