Institute for Money, Technology & Financial Inclusion

Poor people face covariate risk, inequality and also an idiosyncratic risk that affect to personal belonging. However, how the poor people response to these risk varies with respect to the types of risks, jobs, gender, and others. Understanding on the income and consumption smoothing behavior of the poor helps business and government to formulate necessary policy and other strategic actions.

In many cases male and female headed household have different behavior towards risk. Female headed family may have better access to local informal financial institution such as rotated saving, while male headed family have more access to the market of farm and non farm product. Examining how they are different in managing risk fill the literature gap on this issue.

In this report we examine the practice of saving and depleting assets to achieve consumption smoothing among the poorest household in Yogyakarta, Indonesia. We selected 125 households, representing 25 household in each five regions that meet our research purposes. A closed-questioner is used to collect quantitative data for descriptive causal comparative studies. We found that the behavior varies in response to the types of job, gender, and regions. The sources of the income fluctuation also matter in determining the kind of smoothing the people take.