TY - JOUR
T1 - The impact of village funds on rural welfare in Indonesia
T2 - A regression discontinuity in time (RDiT) and difference in difference (DiD) approach
AU - Hartojo, Nurlatifah
AU - Ikhsan, Mohamad
AU - Dartanto, Teguh
AU - Sumarto, Sudarno
N1 - Publisher Copyright:
© 2023 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2023
Y1 - 2023
N2 - This study examines the impact of village fund (VF) transfers on rural welfare in Indonesia. We use the monthly night-time light (NTL) dataset as a proxy for rural welfare for around 75,000 villages from 2014 to 2019. Using Regression Discontinuity in Time (RDiT), we find that VF positively impacts rural welfare, as the value of Average Light Intensity (ALI) increases by almost 97% after the implementation of VF. The highest influence of VF transfers is revealed to be in underdeveloped villages. This indicates preliminary evidence of regional convergence, where poor villages grow faster than developed villages. In addition to the RDiT, the Difference in Difference (DiD) estimations show that the rural welfare of villages that received VF early in 2015 was 19% higher than those without VF in 2015.
AB - This study examines the impact of village fund (VF) transfers on rural welfare in Indonesia. We use the monthly night-time light (NTL) dataset as a proxy for rural welfare for around 75,000 villages from 2014 to 2019. Using Regression Discontinuity in Time (RDiT), we find that VF positively impacts rural welfare, as the value of Average Light Intensity (ALI) increases by almost 97% after the implementation of VF. The highest influence of VF transfers is revealed to be in underdeveloped villages. This indicates preliminary evidence of regional convergence, where poor villages grow faster than developed villages. In addition to the RDiT, the Difference in Difference (DiD) estimations show that the rural welfare of villages that received VF early in 2015 was 19% higher than those without VF in 2015.
KW - impact evaluation
KW - intergovernmental transfer
KW - regression discontinuity design
KW - remote sensing application
KW - Rural economics
UR - http://www.scopus.com/inward/record.url?scp=85150511573&partnerID=8YFLogxK
U2 - 10.1080/13504851.2023.2187016
DO - 10.1080/13504851.2023.2187016
M3 - Article
AN - SCOPUS:85150511573
SN - 1350-4851
VL - 31
SP - 1360
EP - 1367
JO - Applied Economics Letters
JF - Applied Economics Letters
IS - 15
ER -