The Journal of Asian Finance, Economics and Business

Korea Distribution Science Association (한국유통과학회)
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Does Natural Disasters Have an Impact on Poverty in East Java, Indonesia?

  • SANTOSO, Dwi Budi (Department of Economics, Faculty of Economics and Business, Brawijaya University) ;
  • AULIA, Dynda Fadhlillah (Department of Economics, Faculty of Economics and Business, Brawijaya University)
  • Received : 2022.10.10
  • Accepted : 2023.01.15
  • Published : 2023.01.30
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Abstract

There is a strong association between poverty levels and the probability of natural disasters. East Java, however, exhibits a distinct pattern. While the rate of poverty is declining, natural disasters are becoming more severe. Considering that East Java is an area with a high risk of natural disasters and a high poverty rate, this study aims to estimate the effect of environmental preservation and the magnitude of the impact of disasters as measured by the Disaster Risk Index (IRBI) on poverty. The 3SLS model is used on secondary data from 38 districts/cities from 2015 to 2021 as an analytical database. Based on the estimation results, there are 3 findings in this study: (i) the role of government, population development, and economic activity have a strong influence on nature conservation; (ii) nature conservation has a strong influence on disaster risk; and (iii) the disaster risk index has a strong effect on poverty. As a result, areas with a high level of disaster risk have a slower rate of poverty reduction. The role of this research is to show the need for the government's role in improving the quality of natural disaster mitigation anticipation, economic activity, and the role of the population in a sustainable manner.

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Acknowledgement

[1] The author would like to thank the supervisor who has provided input and direction for the development of this research. I also told colleagues who took the time to discuss who volunteered to help me in finding solutions to problems. [2] The authors declare that they are not aware of any competing financial interests or personal relationships that may have influenced the work described in this document.

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