Incorporating sustainability into poverty measurement in Indonesia

Abstract

Environmental conditions that shape livelihoods and vulnerability often remain a blind spot in poverty analysis because conventional poverty statistics rely primarily on monetary indicators and rarely capture environmental constraints. This study examines whether integrating sustainability considerations alters the interpretation of poverty and how such a measure relates to existing policy priorities. Using Indonesia as a case study, a sustainability-integrated poverty measure is constructed by extending the Alkire–Foster multidimensional framework to include economic, social, and environmental dimensions. The results indicate that sustainability-integrated poverty covers a larger share of the population than monetary poverty and reveals heterogeneous deprivation patterns across regions. Several districts in Kalimantan exhibit relatively low monetary poverty but higher sustainability-related deprivation associated with environmental exposure and infrastructure constraints. Comparison with the Indonesian Multidimensional Poverty Index and correlation analysis with Village Fund allocation suggest that sustainability-related deprivation remains largely not reflected in current poverty alleviation policy.