Modelling of Poverty Percentage of Non-Food Per Capita Expenditures in Indonesia Using Least Square Spline Estimator

Abstract

Abstract The average per capita expenditure is the cost incurred for the consumption of all household members for a month divided by the number of household members. The higher expenditure per capita, the higher level of welfare of the population. In Indonesia, the number of non-food per capita expenditures increases every year and followed by a decrease in the number of poor people. Therefore, it is necessary to investigate the effect of changes in per capita non-food expenditure on the percentage of poor people in Indonesia. To investigate it, in this paper, we use nonparametric regression model based on least square spline estimator that could accommodate the data patterns changing at certain points. The results show that for every one-million-rupiah increase in per capita non-food expenditure, if the expenditure per capita is less than 0.47 million rupiah, the percentage of poverty will decrease 68.71%, and if per capita expenditure is more than 0.47, the percentage of poverty will decrease 5.96%.