W11.1_APE_Presidential Cost in Indonesia


  1. Problem Definition

How much cost required of running for President in Indonesia? There is no open source for public knowledge and transparency of presidential cost from one candidate to others. In this blog I try to estimate presidential cost for next general election planned most likely in mid of year 2014.  

 

Figure 1

Figure 1 Indonesia General Election 2014

 

  1. Identify the Feasible Alternative

Since there is no available record for Indonesia, then I used the cost from United States correlated with gold cost per ounce, burger mac [BMI] and iPhone index. Indeed, my estimate will be not accurate enough since this is parametric estimating that fit with class 5 or 4 estimate level.  

  1. Development of the Outcome for Alternative
  1. United Stated Presidential Cost

The historical data of presidential cost in United States[1] with the projection in year 2014 & 2015 present in Figure 2:

 Figure 2

Figure 2 Projection United States Presidential Cost in Year 2014 & 2015

Regression exponential with correlation factor R^2 = 93.8% gives average value of 3,065.93 M-USD in mid of year 2014.  

  1. Correlation Using Gold Cost per Ounce

Same projection process using available data[2], [3] & [4] for US and IDR gold in year 2014 & 2015 [for IDR gold taken with P90 level] present in Figure 3:

  Figure 3a

Figure 3b

Figure 3 USD and IDR Gold Cost Projection in Year 2014 & 2015

Regression exponential with correlation factor R^2 = 95.95% gives average value of gold price 1,653.84 USD per ounce and R^2 = 18.35 M-IDR per ounce in mid of year 2014. Then gold quantity required for presidential election in United States in mid of year 2014 is 3,065.93 M-USD / 1,653.84 USD per ounce = 1.85 M-ounce of gold. The cost required for Indonesia presidential election in mid of year 2014 will be 1.85 M-ounce of gold * 18.35 M-IDR per ounce = 34.01 T-IDR.

  1. Correlation Using Burger Mac Index [BMI]

List of BMI index[5] is always updated per year, and from the graph it shows that produced moving average mode with low correlation factor. For calculation I take the latest BMI index in year 2013 for year 2014 & 2015 present in Figure 4:  

 Figure 4

Figure 4 BMI in Year 2014 & 2015

The cost required for Indonesia presidential election in mid of year 2014 is 3,065.93 M-USD * 5,364.24 BMI index = 16.45 T-IDR.

  1. Correlation Using iPhone Index

A graph developed from data references[6], [7], [8], [9], [10] & [11] for iPhone 4S 32 GB price in United States and Indonesia [for USD iPhone taken with P90 level] present in Figure 5: 

 Figure 5a

 Figure 5b

 Figure 5 iPhone Calculation for Presidential Cost in Year 2014 & 2015

Regression polynomial with correlation factor R^2 = 98.57% gives average value of iPhone index 27,757.75 in mid of year 2014. Then the cost required for Indonesia presidential election in mid of year 2014 is 3,065.93 M-USD * 27,757.75 iPhone index = 85.10 T-IDR.

  1. Selection Criteria

My main target is estimating the cost for presidential in Indonesia using three correlations above since in Indonesia we don’t have such kind of information.    

  1. Analysis and Comparison of the Alternative

The result from three correlations above present in Figure 6 with the representative cost of P90 using Delphi Technique[12]:

 Figure 6

Figure 6 Representative Cost of 2014 Presidential Cost in Indonesia

The projection of cost, gold price and indexes must go until year 2015 since the election will take place in mid of year 2014. Average process required for calculating the cost or gold price and indexes from year 2014 and 2015.   

  1. Selection of the Preferred Alternative

If I take P90 level, then the representative value of presidential election in Indonesia will be around 52 T-IDR.      

  1. Performance Monitoring and the Post Evaluation of Result

For transparency and accountability purpose, the cost required for presidential election should be published since they are expensive. Besides in numbers, they can also form into equivalent gold quantity as gold having purchasing power until now.  

References

[1]opensecrets.org. (2008). Presidential Fundraising and Spending 1976-2008. Retrieved from http://www.opensecrets.org/pres08/totals.php?cycle=2008.

[2]goldpriceoz.com. (2013). US Historical Gold Prices. Retrieved from http://www.goldpriceoz.com/.

[3]indexmundi.com. (2013). Indonesia Historical Gold Prices. Retrieved from http://www.indexmundi.com/commodities/?commodity=gold&months=240&currency=idr.

[4]goldrate24.com. (2013). Indonesia 2013 Gold Prices. Retrieved from http://www.goldrate24.com/gold-prices/asia/indonesia/.

[5]bigmacindex.org. (2013). Big Mac Index. Retrieved from http://bigmacindex.org/2013-Big-Mac-Index.html.

[6]esato.com. (2013). Apple iPhone Price History. Retrieved from http://www.esato.com/phones/phone_price.php?phone=622.

[7]shopper.cnet.com. (2013). Apple iPhone 4 32 GB Black (AT&T). Retrieved from. http://shopper.cnet.com/smartphones/apple-iphone-4-32gb/4014-6452_9-34117595.html.

[8]macclubindonesia.com. (2010). Ini Dia Harga iPhone 3GS Telkomsel. Retrieved from.

http://www.macclubindonesia.com/forums/archive/index.php/t-54890.html.

[9]indomotion.com. (2011). Beberapa Keunggulan iPhone 4 Dibandingkan iPhone 3. Retrieved from http://indomotion.wordpress.com/2011/01/page/18/.

[10]tempo.co. (2012). Ini Harga Resmi iPhone 4S di Indonesia.. Retrieved from http://www.tempo.co/read/news/2012/01/27/072380001/Berhitung-Harga-iPhone-4S-di-Indonesia

[11]teknohp.me. (2013). Daftar Harga Apple iPhone Terbaru 2013. Retrieved from http://www.teknohp.me/2013/09/daftar-harga-apple-iphone-terbaru-2013.html.

[12]Giammalvo, P.D. (2013). AACE Certification Prep.Course Slides 63-66. Jakarta, Indonesia: Mitratata Citragraha.

Giammalvo, P.D. (2013). Personnel Communication-Purchasing Power Parity. E-mail 25 & 28 September 2013.

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3 Comments

Filed under Arif P, Week 11

3 responses to “W11.1_APE_Presidential Cost in Indonesia

  1. Pak Arif, I don’t understand what you are doing with your extrapolations?

    Allow Excel Best Fit curve tools to do the extrapolations for you..

    What I would expect to see are three curves extrapolated until 2020 for:
    1) Gold (in rupiah per ounce)
    2) iPhones (in rupiah per iPhone)
    3) Big Macs (in rupiah per Big Mac)

    Then using the EXTRAPOLATED value, predict the cost of the elections using each of the three methods for 2014 and also for 2019.

    You’ve done the P90 part correctly but what I want to see you doing is extrapolating the numbers using Excel. Right now, I can’t see how you have done the extrapolation which is the important part and which is why I want you to show me your cost estimate not only for the 2014 elections but also the 2019 elections

    Repost as W11.2

    BR,
    Dr. PDG, Jakarta

  2. Pak Arif, To EXTRAPOLATE your numbers into the future in Excel:

  3. Another example of showing how we use this powerful tool……

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