Poverty is an important problem that concerns all societies. It is important to determine the extent and direction of the cases that affect poverty. Some indicators affect poverty positively or negatively, while others may affect both positively and positively. Poverty has emerged in all societies throughout human history. Each society has handled poverty differently and has developed different methods of struggle against poverty. Since poverty concerns societies and economies, it attracts the attention of economists and policy makers. The concept of poverty is not only related to the economy, but also to political, moral, social and religious dimensions. In general terms, poverty is helplessness to meet the basic needs of people for their lives. According to the World Bank, poverty is the situation where the minimum standard of living has not been achieved. There are many types of poverty in the literature. These are absolute poverty, relative poverty, income poverty, human poverty, objective poverty, subjective poverty, mixed poverty, ultra-poverty, temporary poverty, chronic poverty, rural poverty and urban poverty.
In general, it can be said that poverty arises from two reasons in countries. The first is the insufficient job opportunities in countries with economies based on agriculture. The second is the high population growth rate. When the causes of poverty are examined, many factors are seen. These are economic causes (growth and income distribution, economic crises, inflation, tax injustices), labor market causes (unemployment-employment, insufficient unionization and labor market restructuring), social and demographic reasons (rapid population growth, household characteristics, education level, discrimination, settlement, immigration), geographical and political reasons. Today, poverty has become an international problem rather than a national problem. As a matter of fact, organizations such as the World Bank, United Nations and Turk Stat have started to work on poverty. Making policies related to poverty sustainable is important for all countries of the world.
The aim of this study is to identify the factors that affect poverty. In the study, firstly, data sets in terms of factors affecting poverty of all countries around the world were examined. Previously not subject to poverty, Mexico, Indonesia, Turkey and South Korea (MIST) were included in the study. South Korea was not included in the analysis because sufficient data for the analysis was not available. The data was compiled from the official website of the World Bank. The data cover the period 2002-2016 and are taken annually. In the study, factors affecting poverty were analyzed with balanced panel data analysis method. A balanced panel is the case when the panel dataset contains an equal time series for each horizontal section. In the econometric model, the poverty rate at the poverty line is taken as the dependent variable.
Foreign trade deficit rate, inflation rate, exchange rate, population growth rate, GDP growth per capita, the share of public health expenditures in GDP and the share of education expenditures in GDP are independent variables. In this study, Im Pesaran Shin, Levin Lin Chu and Fisher Type unit root tests were used. For poverty, random effect model, fixed effect model and pooled least squares (classical model) are estimated. According to the results of the Hausman test, the classic model proved appropriate and comments were made according to the classic model. In the model, coefficient of determination (R2) was found to be 0.868. Accordingly, the independent variables in the model can explain 87% of the changes in the dependent variable. The F statistics in the model mean that the model is meaningful as a whole. According to the results of the analysis, the variables of exchange rate, per capita growth, public health expenditure rate are significant at 5% significance level.
There is no autocorrelation and heteroscedasticity problem in the model. The probability value of the normality test is 0.95 and it is determined that the residues are normally distributed. The variables of foreign trade deficit rate, inflation rate, population growth rate and education expenditure rate are statistically insignificant. The coefficient marks for all variables in the model are in the same direction as the expectation. According to the model, the poverty rate decreases as the foreign trade deficit rate, inflation rate, exchange rate, population growth rate, per capita income rate, education expenditure rate and public health expenditure rate increase.
According to the model, the variable of public health spending was found statistically significant. It was determined that public health spending negatively affected poverty. It has been determined that 1 unit increase in public health expenditures caused a decrease of 14,946 units in poverty. With the increase in health spending, the individuals living in the country will be healthy. Thus, healthy individuals will participate in employment and poverty may decrease. The coefficient sign of the exchange rate variable that was found statistically significant was negative in accordance with the expectations. In the MIST countries, 1 unit increase in exchange rate reduces poverty rate by 0,004 units in MIST countries. The coefficient sign of the per capita growth rate variable was negative in the same direction as expectations. In the MIST countries, 1 unit increase in per capita growth rate causes 0,664 unit decreases in the poverty rate.
