1.500.000 IDR is bothering

What’s wrong in the listing eligible recipient of 3 kg LPG package activity?

I didn’t know exactly why this is bothering me. May be that’s not a very big problem, but I think that it’s important enough to consider. Do you know where the criteria of eligible subsidy recipient come from? If you say it come from the UU or something like that, it doesn’t answer at all. I do believe that “they” (refer to government) have done some kinds of study until “they” decided conclusion of their study that people who eligible to be the subsidy recipient are:

1. Spend less than 1.500.000 IDR per month for household necessity (Socio Economic Status-SES is under C, D or E),

2. Using pure kerosene on their daily life for cooking purpose,

3. Legal local citizen.

I understand about legal local citizen, because it will be difficult giving subsidy to nomadic people who always travelling. This kind of criterion can be measured by legal identity or family card. The obstacle of this criterion is sometimes Indonesian people although they have been live for years in one place; they don’t think that it’s necessary to make an id or family card. They are not familiar with bureaucracy, or they don’t have enough money to make it. So, they can’t be the recipient although they actually are the local citizen.

Using pure kerosene on their daily life for cooking is making sense. Because the reason of conversion program is to reduce the consumption of kerosene, it make sense to convert just they are who use kerosene. But how with them who use kerosene and firewood? There are two reasons in using firewood along this time, it was easier and cheaper to get or they didn’t have enough money even to buy subsidy kerosene. So, if they stay using kerosene which will not being subsidy item anymore, can they buy it?

The most bothering criterion is “spend less than 1.500.000 IDR per month for household necessity”. I don’t know if what I was thinking true or not but Indonesia itself is a natural clustered or even stratified region. So if we talk about Indonesian life especially in economic matter, there’s no such central tendency that well-enough to represent all Indonesian people habit with only one point estimation. I know that “less than 1.500.000 IDR” is an open interval but with those very high variance among the natural cluster (e.g. province), that interval might be bias.

Since the value of 1.500.000 IDR in Jakarta is not same with 1.500.000 IDR in Rembang, we can’t count it as similar. We used to consider about that different value to make sure that we don’t give subsidy to they are who don’t need it. I ever think to do some kind of clustering region by the Proper Living Index (Indeks Hidup Layak) or/ and Average of Minimum Wage (Upah Minimum Rata-rata). This index gives information, how much money we need to live in one region (in this case maybe province or residences/ municipalities). Output of this work is clusters of regions which have same characteristic of proper living index or/ and average of minimum wage. So we can set the bond of each cluster to make sure that in each cluster the variance of money value is not very high. For example, maybe we can set that in Jakarta, Bandung, Surabaya and Medan, the bond of money spend in one month is 1.500.000 IDR, but in Jepara, Rembang and Banjar is about 1.000.000 IDR because based on the proper living index and average of minimum wage the value of 1.000.000 IDR in Jepara cluster is almost similar with 1.500.000 IDR in Jakarta cluster. This kind of method needs further study and research to know excluding of proper living index and average of minimum wage which are other variables influence the value of money in one region.

Second approach is measuring a household economic ability by indirect measurement. For example it is measured by ownership of some electronic device or their habit in using electricity. This method will produced another variance and bias if the indirect variables for measurement do not have high–enough relationship with economic ability or the variables is also influenced by another variable. But maybe it is better than generalized the economic ability of Indonesian household with number of money that have different value in different place. This statement also need further research, which the better estimation is. In the end these are just words jumping everywhere in my mind and need to shout out and all of my statements are not based on any research or scientific reason yet. Maybe I just wanna know what kind of research they’ve done to decide those criteria, . Thank you for reading… 

[00:25] Thursday, 27th November 2008

2 thoughts on “1.500.000 IDR is bothering

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s