Abstract
Poverty is one of the fundamental problems faced by various countries, including Indonesia. The objective of this study is to identify the variables that have an effect on poverty rate in East Java Province. Applying panel data and regression analysis method, this study compares the three models – the common effect, fixed effect, and random effect. Using Chow Test and Hausman Test, this study found that the best model is Fixed Effect. The empirical outcomes show that education, unemployment, population, dependency ratio, and health insignificantly affect poverty. Variables of Gross Regional Domestic Product (GRDP) per capita, and per capita expenditure has a significant effect on poverty. The higher per capita expenditure tends to increase the poverty level. Then, the higher GRDP per capita tends to lower the poverty in East Java especially. Keywords: unemployment, per capita expenditure, dependency ratio, poverty
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