A MODEL TO ESTIMATE THE ECONOMIC BENEFITS FROM ROAD INFRASTRUCTURES INVESTMENT ON PRODUCTION SECTOR: BASE ON REDUCING THE FREIGHT TRANSPORTATION COST

• Main Author: RIDWAN ANAS (NIM : 35012002), M.
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/29047
• Institution: Institut Teknologi Bandung

Transportation sector is an integral part of a region economic; the reason is because transport as a function of logistic will have impact on production sector. A high cost of production is often having correlation with a high cost of transport in Indonesia and in turn weakened the competitiveness of said production sector. Logistic in Indonesia still dominated by road transport, therefore improvements in road network performance by expanding its capacity should decrease the costs of freight transportation and generate a better performance of production sector. <br /> <br /> <br /> <br /> There are two analytical models generally employed to evaluate the economic benefits of road infrastructure investment: those are macroeconomics and microeconomics approaches. On microeconomics level, economic benefits of one specific investment are estimated using quantification of direct impact (direct user) that users perceived, converted to monetary units and then compared to investment value. This approach would not be adequate to conclusively represent economic potentials benefiting the region related to the investment. <br /> <br /> <br /> <br /> The other model, macroeconomics level, only aggregate the effects of infrastructure value in that investment value is assumed simply as capital boost from public sector and estimated the effects to regional economic (time series or cross section data), without considering mechanism or contribution of transportation infrastructure investment to economy sector. <br /> <br /> <br /> <br /> This study aims to fill the gaps (in either macroeconomic or microeconomic model) by developing a model capable to estimate the value of direct economic benefits of investment in transport infrastructure to production sector. Improvements in transportation performance will affect production sector marginal costs and regionally able to estimate as added value gained by using Input-Output model, so that the effect to regional Gross Domestic Product (GDP) can be observed. <br /> <br /> <br /> <br /> The model developed in this research will able to estimate the economic benefits from transportation infrastructure investment (specific project) on production sector (key sector) and regional PDB, using I-O model and calculating reduction of costs in freight transportation as a shock to production sector. <br /> <br /> <br /> <br /> Analysis done in this estimation model consists of two scenarios: first by changing structure of primary input of key sectors in the amount of freight transport cost and second by multiplier effect scenario. <br /> <br /> <br /> <br /> This research was able to answer the research question in developing a model that capable to estimate the economic benefits that also includes contributions from investment in transport infrastructure (individual project) to production sector and regional economy. This model would be useful for policy makers in deciding priorities and for provincial government (city/district) to optimizing their production sectors (key sectors) so that those sectors would gain better competitive advantages.