Thomas Soseco, Susan Olivia, Les Oxley
Estimation of the determinants of household net wealth that consider heterogeneity across income classes using only average values can lead to faulty interpretations. This paper controls for such variation in classes in relation to efforts to increase household wealth by applying quantile regression using Indonesian household data. For this purpose, the study uses the Indonesian Family Life Survey, using five waves of the survey from 1993 to 2014. Empirical findings show that heterogeneity in household characteristics across classes can influence wealth, with major differences between urban and rural households. Some significant contributors include household size, years of schooling of household head, intergenerational money transfers and agriculture as the main employment sector. Some variables that display an increasing pattern with higher returns for higher classes are years of schooling of household heads and intergenerational money transfers. Meanwhile, the variable with a decreasing pattern is agriculture as the main employment sector. © 2024 ISEAS – Yusof Ishak Institute.
The Faculty of Economics and Business, Universitas Negeri Malang, Jl. Semarang 5, Malang, Indonesia; The School of Accounting, Finance and Economics Operations, The University of Waikato, Private Bag 3105, Hamilton, 3240, New Zealand