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Abstract
<p><span class="fontstyle0">The relations of inflation and poverty can be seen from the contribution commodities of poverty contributor. Increasing prices on the commodity of poverty contributor leads to declining real incomes and income loss in households causing poverty. The commodity of poverty contributor is dominated by fuel and LPG commodities. The AIDS model is a development of the Engel curve and Marshall equations derived from the theory of satisfaction maximization. This model uses the budget share of<br />household on a selected commodity to represent demand variables. This study is an empirical study. The data used are primary and secondary data obtained from field research and literature. The study is located in Banda Aceh and Meulaboh. By using an almost ideal model of demand or an AIDS model, it will be seen that household behavior responds to changes in the price of the commodity of poverty contributor. From observation, inflation rate of non food commodity has a big effect on the welfare of Aceh Province community, both for Banda Aceh and Meulaboh households. The on-food commodity inflation has a huge influence to reduce household welfare in<br />Meulaboh.</span></p><p><span class="fontstyle0"><br /></span><span class="fontstyle2">JEL Classification: </span><span class="fontstyle0">D10, D11, D12</span></p><p><span class="fontstyle0"><br /></span><span class="fontstyle2">Keywords: </span><span class="fontstyle0">AIDS Model, Elasticity, Inflation, Non-food Commodity of Poverty<br />Contributor.</span></p>
Highlights
Poverty is a problem that is often faced in developing countries
The areas with limited economic resources are identical with relatively slow economic growth and high poverty rates
Research Purposes This study aims to examine the changes in household welfare in Aceh Province which is seen from the coefficients of each variable, namely the non-food commodity of poverty contributor, price and income elasticity, and elasticity of social demographic variables
Summary
Poverty is a problem that is often faced in developing countries. The main cause of poverty is the degree of difference in a region's economic resources. The areas with limited economic resources are identical with relatively slow economic growth and high poverty rates. The regions with abundant natural wealth, with supportive human capital can achieve high levels of economic growth and impact on low levels of poverty. A country's poverty rate is measured through its per capita income. The poor are residents with average per capita spending per month below the poverty line. The level of poverty will increase especially when inflation occurs, namely the increase in prices of goods/services that cause the decline in real incomes of society (BPS 2014)
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