Distributional Impact Analysis of Climate Variability in Rural Indonesia

**Table 2. Estimated effects of a one degree Celsius increase in August SSTA on rice production, by province.**

|**Province**|**Crop-Year**<br>**Production**<br>**Effect (Sep-**<br>**Aug) (tmt)**|**Percentage of**<br>**National Effect**|**Significance of**<br>**Production Effect**<br>**(t-statistic)**|**Ratio of**<br>**Production Effect**<br>**to Average Yearly**<br>**Production**<br>**1997/98 – 2001/02**|
|---|---|---|---|---|
|**West Java**|-380|28.83|-3.01|**-0.037**|
|**Central Java**|-238|18.06|-3.67|**-0.026**|
|**East Java**|-232|17.60|-4.06|**-0.026**|
|**South Sulawesi**|-102|7.74|-2.02|**-0.033**|
|**North Sumatra**|-54|4.10|-1.57|**-0.016**|
|**West Sumatra**|-46|3.49|-2.18|**-0.026**|
|**East Kalimantan**|-41|3.11|-2.60|**-0.118**|
|**North Sulawesi**|-38|2.88|-3.31|**-0.104**|
|**West**<br>**Nusa**|-30|2.28|-2.63|**-0.021**|
|**Tenggara**|||||
|**Riau**|-17|1.29|-2.14|**-0.041**|
|**Southeast Sulawesi**|-10|0.76|-1.68|**-0.033**|
|**Bali**|-3|0.23|-2.82|**-0.003**|
|**Subtotal**|**-1.191 **|**90.36**|||
|**Coefficient for all**<br>**Indonesia**|**-1.318**|**100.00**|||

Source: Falcon _et al_ . (2004).

**To obtain empirical evidence on this question, we utilize the first three rounds of the Indonesian Family Life Survey.**<sup>**9**</sup> The IFLS is a longitudinal household survey that began with roughly 7,200 households taken from 320 communities in 13 out of Indonesia’s 33 provinces. The 13 provinces encompass 83 percent of the population and the survey covers virtually all of the provinces highlighted in figure 2, which account for roughly 85 percent of national rice production. Subsequent rounds of the survey, conducted in 1997 and 2000 attempted to re-contact all households interviewed in 1993, and household attrition rates were generally below 5 percent. Split-off households, which were tracked as long as they remained in the 13 provinces, are included in the sample but treated as new households. The exclusion of urban areas limits the total sample to 11,400 observations on 4,000 households, taken from 181 communities in 1993.<sup>10</sup> The consumption module consists of 37 food and 19 non-food items, and self-consumption is reported separately. Household per capita expenditure is equal to the sum of all expenditures reported by the spouse in the past month, deflated by a local price index, divided by the number of persons in the household.<sup>11</sup>

**The national socioeconomic survey is as an important and complementary source of data on household consumption.** Each year, in late February or early March, a new set of roughly 190,000 households are interviewed as part of the core of the national socio-economic census (SUSENAS). The dataset includes results from a small consumption module, consisting of 15 food items and 8 non-food items, that combines purchased and self-consumption. To utilize these data, we randomly drew a 5 percent sample of all rural households from 1993 to 2004, stratified by district and per capita

> 9 A fourth round of the survey was conducted in 2007, but this was not used in study, due to our inability to obtain rainfall data beyond 2004.

> 10 Additional information about the survey is provided in Strauss _et al_ (2000), Frankenberg and Thomas (1997), and Frankenberg and Karoly (1993).

> 11 For IFLS1, per capita consumption is taken from the expend2.dta file provided in the re-release of IFLS, which imputes nonfood expenditures for households that were not asked to report them. In addition, because no price index is provided for the 1993 data, the national price index for the local provincial capital is used to deflate expenditures from 1993 to 1997.

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