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Natural resource prices and welfare: Evidence from Indonesia’s coal and palm oil boom

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  • Donny Harrison Pasaribu

Abstract

This study measures the impact of coal and palm oil prices during the 2000s commodity boom in Indonesia on regional poverty, household consumption, employment and wages. The strategy is to exploit the within-country variation in exposure to each commodity, interacted with exogenous changes in global commodity prices. I focus on two of Indonesia’s main export commodities, coal and palm oil. I find that an increase in the price of coal and palm oil both decrease the poverty rate in districts that produce them relative to districts that do not. However, the mechanisms through which they affect poverty are different.

Suggested Citation

  • Donny Harrison Pasaribu, 2020. "Natural resource prices and welfare: Evidence from Indonesia’s coal and palm oil boom," Departmental Working Papers 2020-16, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2020-16
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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/acde_crawford_anu_edu_au/2020-11/acde_td_pasaribu_2020_16.pdf
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    More about this item

    Keywords

    Natural resource booms; welfare; poverty; subnational impacts;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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