How much the Indonesian Citizens Actually Earned each Year?

Due to the pandemic that has occurred recently, I found a lot of news highlighted its impact on economic sector. Some people’s incomes have decreased. Some people even lose their jobs so they don’t get any income at all. From this occurrence, I became curious about how much the Indonesian population actually earned before this pandemic. I found some interesting publication from Badan Pusat Statistic (BPS) here and Bank Indonesia Metadata here about Gross Regional Domestic Product of Regencies/Municipalities in Indonesia 2014–2018.

Mapping Distribution Per Capita GRDP Regencies/Municipalities in Indonesia

At first, I want to say sorry because this paragraph will probably be an awkward-stiff-confusing explanation. (I will try to not do the same in another paragraph 😮). From Bank Indonesia Metadata, Gross Regional Domestic Product (GRDP) is an important indicator for knowing the economic development in an area in a certain period, either at current prices or at constant prices. GRDP at Current Prices describe added value of goods and services that calculated using prices in the current period. While GRDP at Constant Prices describe the same variables but calculated using the prevailing prices in a certain year as the base year. If you are interested to know the more detail, you can read on BI metadata directly or in Subdit Rujukan Statistik of Badan Pusat Statistic here.

GRDP at Current Prices is used for knowing the distribution economy of an area. I will use this data, since it’s represent the total income of each region from its population. This BPS publication makes analysis easier cause it provides Per Capita GRDP at Current Prices too. This per capita data indicates the value of GRDP per head or per one resident. Unfortunately, I only found data for 2014–2018, and only 2014–2016 has fix value. So, to avoid bias I will use 2014–2016 data only. I don’t really have deep understanding, but I think it will be better if we use Regional Income directly to represent income per head of population. The things is I can’t find it anywhere. Okay let’s back then.

In this article I want to find out about a few things and discuss its results to get some insights:

  • Trend of Per Capita GRDP (at Current Prices) in each Regency/Municipality
  • Regencies/Municipalities segmentation based on its latest GRDP (2016)

1. Data Cleaning

The dataset used in this project is consist of two files:

  • Per Capita GRDP of Regencies/Municipality in Indonesia.
    As I mentioned before, this data is taken from BPS publication. Since it was in pdf format, I transform it to xls form at first.
  • GADM data of Regency/Municipality in Indonesia.
    It’s a Database of Global Administrative Areas. I will use it for doing map visualization of segmentation result to make it more ‘real’ so it make easier for us in getting some insight. This file is spatial file in shapefile format that can automatically give coordinate of a region based on region name. The data is taken from here.

Both of them will be combined to build map visualization. The same feature of these two files are Regency/Municipality name. It makes me should make sure they both have the same format, to simplify the combining process. In the GADM file, Regency/Municipality name is separated from its type, so I did the same to GRDP file from BPS since it will be more complicated in the next step if we do otherwise.

Example of region with same Regency and Municipality name
Example of region with same Regency and Municipality name
Example of region with same Regency and Municipality name

After that, I do some sorting to detect all region with same Regency and Municipality name like Tangerang. And then, I added “Kota” word in every region city with the same regency name.

Finally, I joined these two files with Tableau Public since it’s support shapefile format and can be used for doing some visualization including mapping distribution.

2. Analysis

Note: Since the available latest data is 2016 data, so I only include 2014–2016 data in calculating average growth and show the 2016 data as the latest data.

Here some interesting information I get:

  • Average growth of Per Capita GRDP (at Current Prices) of all Regency/Municipality in Indonesia is about 8,28% (positive).
  • 23 from 512 Regency/Municipality have negative average growth. It indicates that they have decreased incomes.
  • There is an outlier data: Sumbawa Barat. It has 73,1% average growth of Per Capita GRDP (at Current Prices). As it turned out, in 2015 they tripled their revenue from mining sector from the previous year. Mining sector contribute about 80% of the total GRDP of Sumbawa Barat Regency.
  • Regencies/Municipalities with highest Per Capita GRDP (at Current Prices) is scattered in various provinces and not only in Java Island.
  • The average Per Capita GRDP at Current Prices of all Regency/Municipality is IDR 45,792,000.
  • There are only 136/512 (26,4%) of total Regencies/Municipalities in Indonesia with average Per Capita GRDP at Current Prices above average.

Next, I segmented these Regencies/Municipalities based on Average Growth Rate and Total of Per Capita GRDP (at Current Prices). After several manual trial process, I decide to divide them into 6 sections:

  • Low Income but High Growth Rate
    This segment has Latest Per Capita GRDP (at Current Prices) IDR 29,458,000 with 9.16% average growth rate.
  • Fair Income Low Growth Rate
    This segment has Latest Per Capita GRDP (at Current Prices) IDR 66,949,000 which means it is classified as having average above the overall average (IDR 45,792,000). Have 4.29% average growth rate.
  • Middle Income
    This segment has Latest Per Capita GRDP (at Current Prices) IDR 180,028,000 with 1.24% average growth rate.
  • Higher Income
    This segment has Latest Per Capita GRDP (at Current Prices) IDR 342,784,000 with 3.35% average growth rate.
  • Mining Area
    There are only three regency in this segment, with IDR 123,958,000 2016 Per Capita GRDP (at Current Prices) and high average growth rate: 48.73%. This area tends to have high average growth rate cause the mining sector is give an outstanding impact to the regency. If you want to know more about these regency GRDP, I put the publication link from Badan Pusat Statistic of each regency in the reference section below.
  • Central Jakarta
    Cause this area is little ‘outlier’ in clustering visualization, so I decided to make this area to be separated from another region. This area has highest 2016 Per Capita GRDP (at Current Prices): IDR 578,711,000 and classified as having a high average value 10.80%
Mapping Distribution of each Segment
List Region of each Segment

Evidently, region with Per Capita GRDP (at Current Prices) above the average tend to have low average growth. (Of course, it’s excluding Mining Area and Central Jakarta!) It may be because the basis value in calculating growth is using previous year as a comparison, which value is quite high.

[Updated]: I have added Province multiple drop down filter in this Segment Explanation Dashboard too.

3. Summary

As a summary, I will answer the question in the title section. How much the Indonesian Citizens Actually Earned each Year? It can be represented by Per Capita Growth Regional Domestic Product (at Current Price) data. In general, each individual of Regency/Municipality in Indonesia earn IDR 45,792,000 per year with 8.28 % average growth rate. But, with segmentation process it can be answered more specific where each segment have different average income and average growth. This can be useful for doing policy analysis, market analysis, etc either for individual, government or business party where each segment might need different treatment.

Reference:
[1] Sub-Direktorat Konsolidasi Neraca Produksi Regional. 2019. Produk Domestik Regional Bruto Kabupaten/Kota di Indonesia 2014–2018. Jakarta: Badan Pusat Statistik, 147–180.
[2] Bank Indonesia. Metadata Sekda: Produk Domestik Regional Bruto. Accessed October 11, 2020.
[3] Subdit Rujukan Statistik, Badan Pusat Statistik. Metadata Indikator: PDB/PDRB per Kapita. Accessed October 11, 2020.
[4] Subdit Rujukan Statistik, Badan Pusat Statistik. Produk Domestik Regional Bruto (Lapangan Usaha). Accessed October 11, 2020.
[5] Seksi Neraca Wilayah dan Analisis Statistik. 2017. Produk Domestik Regional Bruto Menurut Lapangan Usaha Kabupaten Sumbawa Barat 2012–2016. BPS Kabupaten Sumbawa Barat, 61–67.
[6] Badan Pusat Statistik Kabupaten Banggai. PDRB Menurut Lapangan Usaha (Juta Rupiah), 2015–2019. Accessed October 11, 2020.

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