The poverty measurement analysis of three districts in Terengganu, Malaysia using principal component analysis

Abstract

Deprivation indices are widely used in public health study. These indices are also referred as the index of inequalities or disadvantage and poverty index that commonly referred to the quality of life. Even though, there are many indices that have been built before, it is believed to be less appropriate to use the existing indicesto be appliedin other countries or areas which had different socio-economic conditions and different geographical characteristics. The objectives of this study are to investigate the relationship between social economic well-being characteristics variables using correlation analysis and to develop a suitable multidimensional deprivation indexinSetiu Wetlands, Terengganu which are Besut, Setiu and Merang to reflect poverty disparity using factor analysis. In this study, factor analysis using principal component extraction method is applied to carry out factor reduction. Dimensionality of several observed variables data with similar patterns of responses will be reduced using factor analysis approach. As a result, a new measurement of poverty in Terengganu will be developed using the chosen factors. The analysis based on the new measurements could show the poverty incidence and disparity among people with relevant measures. This research is suitable for policymakers to refer and understand what local residents need and lack in order to design better plan for development in the areas.