Structural Equation Modeling-Partial Least Square for Poverty Modeling in Papua Province

Abstract

Poverty in Papua Province in 2018 has increased from the previous year. The poverty rate in Papua Province in March 2018 reached 27,74%. This study aims to analyze the factors that influence it so that it can be handled properly. The research method used in this research is Structural Equation Modeling (SEM) with the Partial Least Squares (PLS) approach. The research variables used consisted of 4 latent variables (Poverty, Economy, Human Resources (HR), and Health) with 16 indicators (manifest variables). Based on the analysis that has been done, it is found that economic and health variables have a negative and significant effect on poverty with path coefficients of -0,421 and -0,270, respectively. The health variable has a positive and significant effect on HR with a path coefficient of 0,496. Meanwhile, the HR variable has a positive and significant effect on the economy with a path coefficient of 0,801. It can be concluded that there are two variables that have a significant effect on poverty in Papua Province, including the economy and health.