Eradicating extreme poverty is a key objective of Sustainable Development Goal (SDG) 1, with a global benchmark of reducing the proportion of people living below the US1. 90 PPP poverty line. However, in 2024, Indonesia—particularly North Sumatra Province—continues to face persistent challenges in achieving this target. Direct estimation based on the Foster-Greer-Thorbecke (FGT) formula using SUSENAS microdata suffers from large sampling errors (RSE > 25 percent) and zero estimates in multiple districts due to small or absent samples, indicating serious issues of zero inflation and overdispersion. To overcome these limitations, this study applies a model-based Small Area Estimation (SAE) approach using the Zero-Inflated Binomial Generalized Linear Mixed Model (ZIB-GLMM). This method incorporates auxiliary variables from the 2024 PODES dataset and effectively addresses the dual complexities of excess zeros and inter-district variability. Simulation results show that ZIB-GLMM outperforms conventional SAE models in terms of predictive accuracy and model stability. The proposed method offers realistic and policy-relevant district-level estimates of extreme poverty, providing robust evidence to inform targeted interventions and strengthen Indonesia’s national agenda to eradicate extreme poverty.
Gaol et al. (2025) studied this question.