Open AccessTHE PRICE CHANGES OF BASIC NEEDS ON THE POVERTY LEVEL
Publication year - 2020
Publication title -
trikonomika
Language(s) - English
Resource type - Journals
eISSN - 2355-7737
pISSN - 1411-514X
DOI - 10.23969/trikonomika.v19i2.3231
Subject(s) - purchasing power , poverty , basic needs , inflation (cosmology) , economics , consumption (sociology) , inflation rate , agricultural economics , sugar , food prices , food security , economic growth , food science , interest rate , monetary economics , geography , agriculture , biology , macroeconomics , social science , physics , archaeology , sociology , theoretical physics
Poverty is often identified in developing countries. One measure of poverty is the ability to fulfill basic needs, particularly food needs. On the other hand, food needs are very sensitive to changes in inflation. The more fluctuating inflation will change the prices of necessities, which then exacerbate poverty conditions. Using time-series data for the period 2005-2016 and using the Ordinary Least Square method, this study examines the impact of changes in the prices of necessities on poverty levels in North Sumatra. The results showed that the increase in rice prices, sugar, cooking oil, beef, and salt had an impact on the poverty level in North Sumatra, while the increase in the price of eggs and kerosene was the opposite. The increase in rice prices significantly impacted all of the commodities studied than for other commodities, followed by salt, sugar, beef, and cooking oil. Changes in the ability to consume basic needs indicate a decrease in people's purchasing power. Further, this indicates that the change in consumption of these various commodities also means that the poverty rate tends to increase.