Analysis Of Poverty Dynamics In West Nusa Tenggara Province: An Error Correction Model (ECM) Approach

Firmansyah Firmansyah; Iwan Harsono; Prayitno Basuki

doi:10.55681/economina.v5i5.2047

Authors

Firmansyah Firmansyah Universitas Mataram
Iwan Harsono Universitas Mataram, Indonesia
Prayitno Basuki Universitas Mataram, Indonesia

DOI:

https://doi.org/10.55681/economina.v5i5.2047

Keywords:

Kemiskinan, Produk Domestik Regional Bruto (PDRB), Pengangguran, Inflasi, IPM, ERROR CORRECTION MODE

Abstract

This study aims to analyze the effects of Gross Regional Domestic Product (GRDP), the Open Unemployment Rate (OUR), inflation, and the Human Development Index (HDI) on poverty rates in West Nusa Tenggara Province in both the long and short term. This study employs an explanatory quantitative approach using annual secondary data from 2000 to 2025 obtained from the Central Statistics Agency (BPS) of West Nusa Tenggara Province. The analysis method used is the Error Correction Model (ECM) to examine the long-run equilibrium relationship and short-run adjustment dynamics among the variables. The results of the study indicate that in the long run, GRDP has a negative and significant effect on poverty, while the unemployment rate has a positive and significant effect; the HDI, however, has no significant effect. Inflation also has no significant effect on poverty. In the short run, none of the variables (GRDP, unemployment rate, inflation, and HDI) have a significant effect on poverty. Simultaneously, the independent variables have a significant effect on poverty in the long run, but not in the short run. Additionally, the Error Correction Term (ECT) results show a negative but insignificant value, indicating that the adjustment process toward long-run equilibrium has not yet proceeded optimally in the short run. These findings suggest that poverty dynamics in West Nusa Tenggara Province are more influenced by long-term structural factors than by short-term fluctuations. Therefore, poverty alleviation policies should focus on promoting inclusive economic growth, job creation, price stability, and the sustainable improvement of human development quality.

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