Tracking the Multidimensional Poverty Post‐Disaster: Empirical Evidence of the 2004 Tsunami in Indonesia

ABSTRACT Natural disasters have a prominent effect on a household's well‐being. Losing income, assets, and livestock puts households at risk of poverty. Most post‐disaster poverty assessments rely on monetary indicators, overlooking persistent non‐monetary losses. Using longitudinal data from the Survey of the Tsunami Aftermath and Recovery (STAR) following the 2004 Indian Ocean tsunami, we track multidimensional poverty over multiple waves and examine its determinants. We construct the Multidimesional Poverty Index (MPI) using the Alkire‐Foster method and estimate year‐specific logit models to identify risk factors. The study shows a positive decline in multidimensional poverty, but recovery is uneven. The deprivations related to illness, schooling, sanitaion, and reliance on unclean cooking fuel remain the most persistent. Households headed by women, lower‐educated heads, larger households, those in vulnerable locations, and those with damaged dwellings are consistently more likely to be multidimensionally poor; government assistance is associated with reductions in MPI, often with a short lag. Therefore, the results show that non‐monetary poverty can persist even as monetary indicators improve, implying that income‐based monitoring understates lingering welfare losses. Policy should therefore pair income support with targeted investments in education continuity, primary health care, and basic services especially in vulnerable areas to accelerate multidimensional recovery.