What is the Relationship between Marine Protected Areas (MPAs) and Poverty in Indonesia?

The main purpose of this study is to examine whether marine protected areas (MPAs) in Indonesia have an impact on poverty alleviation. It takes municipality and province as unit of analysis, and employs a panel data set from 2006 to 2010 for municipality level and from 2005 to 2010 for province level. In the estimation, there are 294 municipalities and 33 provinces are involved. The fixed effect model is employed in order to control for regional and municipality characteristics. As outcome variables different measures of poverty are considered and compared such as the poverty headcount index, the poverty gap, and the poverty severity. The primary independent variable is MPAs, which is defined using different definitions such as the share of MPAs, an indicator for the presence of MPAs, and the absolute size of MPAs. Population growth and GRDP growth are the other independent variables which control for regional socioeconomic characteristics. The results show a significant impact of MPAs on poverty reduction. It is demonstrated by the negative relationship between MPAs and the poverty measures for almost all indicators of poverty and MPA definition. On average, protection of marine areas gives contribution on poverty alleviation. Beyond MPAs, this paper also confirms existing findings about poverty dynamics. Characteristics of the region, economic growth and population growth determine poverty considerably. Regarding economic growth, the poorer the area the more desirable the formation of an MPA.