# W11.2_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 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 present in Figure 2:

Figure 2 United States Presidential Cost Projection

1. Correlation Using Gold

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

Figure 3 USD and IDR Gold Price Projection

1. Correlation Using Burger Mac

List of burger mac price and index[5] is always updated per year. Using this list, same projection created and present in Figure 4:

Figure 4 USD and IDR Burger Mac Price Projection

1. Correlation Using iPhone

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 price with P90 level] with price projection present in Figure 5:

Figure 5 USD and IDR iPhone Price Projection

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

I develop three projection graph for each correlation assumed as best case, worst case and most likely for of P90 level using Delphi Technique[12]:

Figure 6 Representative Cost of 2014 & 2019 Presidential Cost in Indonesia

The projection of cost, gold price and indexes must be extended to 10-13 years ahead and the result is present in Figure 7:

Figure 6 Result of 2014 & 2019 Presidential Cost Projection in Indonesia

From figure above, it can be seen that many differences result due to data correlation relevant with numbers of data available. Gold gives high data correlation since the data is available in longer time compare to big mac and iPhone [maximum at year 1999 for big mac and year 2010 for iPhone]. Based on this fact, the most logic to say for Indonesian presidential is in range between these correlations.

1. Selection of the Preferred Alternative

If I take P90 level, then the representative value of presidential election in Indonesia will be between 60-180 T-IDR for year 2014 and 300-1470 T-IDR for year 2019.

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

[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.

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

[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, 29 & 30 September 2013.

Filed under Arif P, Week 11

### 3 responses to “W11.2_APE_Presidential Cost in Indonesia”

1. AWESOME!!!! Now you’ve got it Pak Arif!!!!!

Excellent job!! NOW, what you will have to do to VALIDATE this (Step 7) is to plot the actual reported costs of the election against your model….. See which of the cost estimating models comes closest to matching what the expenditures are. Then once you have validated the model then you can use it for other similar applications!!!

The same principle applies to using this powerful tool in your real life working projects. Once you have created and VALIDATED a cost estimating model (see Engineering Economy, pages 78-96, with special attention to Figure 3-7 on page 92 and pages 93 and 94) you can use that model to consistently produce ACCURATE, PRECISE and RELIABLE cost estimates.