Grouping of Provinces in Indonesia Based on Community Welfare Level Indicators Using Hierarchical Cluster Analysis

Community welfare is an integral part of efforts to achieve several targets of the Sustainable Development Goals in Indonesia, namely ending poverty, as well as decent work and economic growth. For this reason, the grouping of provinces in Indonesia based on indicators of the level of community welfare is carried out to improve the standard of living of the Indonesian people by comparing the performance of several hierarchical cluster methods. The best cluster analysis method is obtained by looking at the smallest internal cluster dispersion rate (icd rate) and the largest R². The variables used in this study are the percentage of families who have the largest building floor in the form of land, inadequate drinking water sources, do not have electricity, have inadequate sanitation, the unemployment rate, the poverty rate in villages and poverty rate in cities. Based on the analysis result, the most optimal method was obtained in grouping provinces in Indonesia based on level of community welfare indicators, which is Ward’s method, with the optimal number of clusters forming as many as 5. This study is expected to help improving the welfare of the people in Indonesia covering various aspects of life. Thus, the standard of living of the Indonesian people can increase and the SDGs targets in Indonesia can be achieved.