Abstract
The objective of this study is to determine the long-run effect of GDPpc, HDI, unemployment and inflation on the poverty rate at the national level in Ecuador, by applying the DOLS, FMOLS and CCR methods to contribute with significant findings for decision making. The empirical analysis includes descriptive statistics, correlation of variables, OLS regression analysis, unit root tests, the cointegration test and the aforementioned methods. The results show that in the long run GDPpc and HDI are statistically significant determinants of poverty reduction; therefore, a 1% increase in these variables allows poverty to decrease by 1.777% and 2.185% in that order, respectively. Unemployment lacks statistical and economic significance in the explanation of poverty and inflation increases poverty and has statistical significance, thus, the increase of one percentage point of this condition causes poverty to increase by approximately 0.016%. The empirical evidence provided in this study allows policy makers in Ecuador to make the right decisions, strategies and policies aimed at reducing poverty and improving social welfare.