Concentration Terminology

D I S T R I B U T I O N

RELATIVELY EVEN RELATIVELY UNEVEN(= Concentration)

SPATIALDISTRIBUTION "Dispersion" "Localization"

INDUSTRIALDISTRIBUTION "Diversification" "Specialization"

Table #1 Localization of an Industry

REGIONS

PERCENT OF NATIONAL TOTAL EMPLOYMENT OF

FOCAL INDUSTRY IN REGION (A-D)

PERCENT OF TOTAL U.S. MANUFACTURING

EMPLOYMENT IN REGION (A-D)

DIFFERENCE IN RELATIVE REGIONAL EMPLOYMENT IN

FOCAL INDUSTRY & ALL MANUFACTURING ACTIVITIES

LOCATION QUOTIENT OF FOCAL INDUSTRY

IN RESPECTIVE REGIONS

A 15 35 -20 .43

B 35 30 +5 1.17

C 30 20 +10 1.5

D 20 15 +5 1.33

Sum 100% 100% -20+20 (1.0)

The higher the coefficient, the greater the localization (spatial concentration) of the industry.

Table #2 Specialization of a Region

INDUSTRIES

PERCENT OF TOTAL (REGIONAL)

EMPLOYMENT IN FOCAL REGION IN INDUSTRIES

(A-D)

PERCENT OF TOTAL U.S. MANUFACTURING EMPLOYMENT IN INDUSTRIES (A-D)

DIFFERENCE BETWEEN REGIONAL &

NATIONAL EMPLOYMENT IN 4

INDUSTRIES

LOCATION QUOTIENTS OF

THE INDUSTRIES IN FOCAL REGION

A 15 35 -20 .43

B 35 30 +5 1.17

C 30 20 +10 1.5

D 20 15 +5 1.33

Sum 100% 100% -20+20 (1.0)

The higher the coefficient, the greater the regional specialization.

REGIONAL ANALYSIS

TIME - SPACE

(INTRA-) REGIONAL INTER-REGIONALSPATIAL

INTERACTIONAGGREGATES

F L O W SAGGREGATE

COMPARISONSF L O W S

STATIC / CROSSECTIONAL GDP/GRPRegional Input-Output

Location QuotientInterregional Input-Output

Gravity ModelNetwork Analysis

COMPARATIVE STATIC ANALYSIS

Regional Multipliers

Interregional MultipliersGravity-based Multipliers (Lowry)

COMPARATIVE CROSSECTIONAL ANALYSIS

Regional Rates of Change

Shift & Share Analysis

MULTI-PERIOD ANALYSISRegional Cohort Analysis

Inter-Regional Cohort Migration Analysis

Stochastic Spatial Models

DYNAMIC ANALYSIS Diffusion Models

Location Quetiont (L.Q.)

Metode Location Quetiont (L.Q.) merupakan metode untuk membandingkan potensi antar sektor dan antar daerah. Adapun rumus L.Q. yang digunakan sebagai berikut : Pi.j

---------- P.jL.Q. = ------------------ Pi. ----------- P.Keterangan :L.Q. = nilai Location QuetiontPi.j = nilai skala potensi sektor/komoditas i di daerah j P.j = nilai skala potensi seluruh sektor/komoditas di daerah jPi. = nilai skala potensi sektor/komoditas i di seluruh daerahP. = nilai skala potensi seluruh sektor/komoditas di seluruh daerah.

L.Q. > 1 = Sektor/Komoditas UnggulanL.Q. < 1 = Sektor/Komoditas Non Unggulan

Analisis Analisis Shift and ShareShift and Share Untuk mengetahui kinerja sektor-sektor pembangunan di Untuk mengetahui kinerja sektor-sektor pembangunan di suatu suatu

daerah daerah dilakukan analisis dilakukan analisis Shift and ShareShift and Share.. Menganalisis perubahan berbagai indikator kegiatan ekonomi Menganalisis perubahan berbagai indikator kegiatan ekonomi

(produksi/tenaga kerja) pada dua titik waktu pada suatu wilayah.(produksi/tenaga kerja) pada dua titik waktu pada suatu wilayah. Kriteria yang digunakan meliputi Kriteria yang digunakan meliputi pertumbuhapertumbuhan nasionaln nasional, ,

pertumbuhan proposional, dan pertumbuhan pertumbuhan proposional, dan pertumbuhan pangsa pangsa wilayahwilayah.. Selanjutnya dengan pendekatan empat Selanjutnya dengan pendekatan empat dimensi/kuadran dapat ditentukan kinerja masing-masing sektor dimensi/kuadran dapat ditentukan kinerja masing-masing sektor pada setiap kecamatan yang dikategorikan menjadi unggul, agak pada setiap kecamatan yang dikategorikan menjadi unggul, agak unggul, agak mundur, dan mundur. unggul, agak mundur, dan mundur.

Shift and ShareShift and ShareThe Proporsional Shift formula is very simply:

Proporsional Shift = Local Growth Rate for Sector I for Period X

- Regional Growth Rate for Sektor I for Period X

The Differential Share formula is very simply:

Differential Share = Regional Growth Rate for Sector I for Period X

- Regional Growth Rate for Total Sector for Period X

Growth Rate = (Product T1/Product T0)

Shift and ShareShift and ShareAnalisis ini dipergunakan untuk mengetahui kinerja perekonomian daerah terhadap

pertumbuhannya selama suatu periode tertentu. Kombinasi dari hasil perhitungan analisis

shift dan share akan menghasilkan indikator-indikator sebagai berikut :

- Nilai proporsional shift dan differential share-nya positif, maka sektor ini dianggap

mempunyai peranan penting dalam perekonomian wilayah internal dan juga terhadap

perekonomian wilayah yang lebih luas. (Unggul)

- Nilai proporsional shift positif dan nilai differential share-nya negative, maka sektor ini

hanya meningkatkan pada sistem perekonomian yang lebih luas . (Agak Unggul)

- Nilai proporsional shift negative dan nilai differential share positif, maka sektor ini

hanya dapat meningkatkan peranannya dalam wilayah internal, tetapi tidak dapat

meningkatkan perekonomian yang lebih luas (kabupaten). (Agak Mundur)

- Nilai proporsional shift dan differential share negative, maka sektor yang bersangkutan

tidak mempunyai peranan dalam meningkatkan perekonomian internal ataupun

perekonomian wilayah yang lebih luas. (Mundur)

proporsional shift

differential share

+

+

-

-

PPendekatan endekatan EEmpat mpat DDimensi/imensi/KKuadranuadran

UnggulAgak Mundur

Agak UnggulMundur

Penggandaan BasisPenggandaan Basis

Perubahan pada total tenaga kerja

• Penggadaan Basis =

Perubahan pada tenaga kerja basis

Three Basic Types of Interaction Models

ijjiij SWVfT ,, i jGeneral Formulation:V W

Tij

Sij

Gravity Model

2ij

jiij S

WVT

i j35 20

Sij = 8

Tij = 10.9

Tji = 10.9

Potential Model

j ij

ji S

WT

2

i

j

kl

20

1535

3

56

1.00.6

2.2Ti = 3.8

Retail Model

i

j

ijij

V

W

SB

1

i

jk15

40

3576

Bij = 4.9Bik = 2.8

Gravity ModelsGravity Models(http://faculty.washington.edu/krumme/systems/gravity.html)(http://faculty.washington.edu/krumme/systems/gravity.html)

IIijij = = f (Rf (R

ii, A, Ajj))

----------------------f (Df (D

ijij))

Interaction (I) between i and j is a function of repulsive forces (R) at i and attractive forces (A) at j, and an inverse function of the friction/distance (D) between i and j

Iij = the interaction volume from i to jRi = a parameter representing (repulsive) factors which are associated with "leaving" i (such as outmigration)Aj = a parameter representing (attractive) factors related to going to j (such as inmigration)Dij = the distance between i and j

The most basic formulation of the gravity model The most basic formulation of the gravity model simply substitutes the populations at i and j for the simply substitutes the populations at i and j for the

R and A factors.R and A factors.

Iij = k Pi Pj

-------Dij

b

P = Population of i & j

k & b = constants

X

2,000,000

Y

ZW

800 km

800 km400 km

2,000,0001,000,000k = 0.00001

(people per week)

2,000,000

Weight (P)

Distance (D)

Constant (k)

Centroid (i) Interaction (T)

Application of an Elementary Spatial Interaction Equation

  W X Y Z Ti

W   100,000     100,000

X 100,000   50,000 25,000 175,000

Y   50,000     50,000

Z   25,000     25,000

Tj 100,000 175,000 50,000 25,000 350,000

ij

jiij D

PPkT

Elementary Formulation

Application of a Simple Spatial Interaction Equation

X

2,000,000

Y

ZW

800 km

800 km400 km

2,000,0001,000,000k = 0.00001

(people per week)

2,000,000

Weight (P)

Distance (D)

Constant (k)

Centroid (i) Interaction (T)

  W X Y Z Ti

W   71,378     71,378

X 6,059   2,203 1 8,263

Y   19,420     19,420

Z   153,893     153,893

Tj 6,059 244,692 2,203 1 252,954

ij

jiij D

PPkT

Simple Formulation

Exponent

= 0.95 = 1.05

= 1.25 = 1.0 = 0.95

= 1.2 = 0.4

= 1.03 = 0.96

Lowry Migration Model Migration from i to j is directly related to high wages at j, low relative unemployment at j and a large civilian labor force at either origin and/or destination. I t is inversely related to high wages at i, low unemployment at i and increasing distance between i and j.

Mij = k [

Ui --------

Uj x

Wj --------

Wi x

Li Lj ----------

Dij ] eij

M = number of migrants L = persons in labor force U = unemployment in % W = hourly wage in manufacturing D = airline distance k = gravitational constant e = error term

Source: I ra Lowry, Migration and Metropolitan Growth: Two Analytical Models (1966)

Economic Base Concept & AnalysisEconomic Base Concept & Analysis(http://faculty.washington.edu/krumme/350/econbase.html)(http://faculty.washington.edu/krumme/350/econbase.html)

What are "basic" and "non-basic" activities? Basic:

o Exports (incl. Export Services, Tourism) o Investments: Housing, Business etc. o Government Expenditures (Gov. Investments, Current

Operations), o Transfer Payments

= "exogenous" to our model "Non-Basic": household-induced, local-service oriented activities = "endogenous" to our model

Export Environments(e.g.: Aerospace &

Software) Exporting Sectors (Basic) Households Local Sectors (Non-Basic)

Indirect Direct Direct Indirect Basic HhsNon-Basic

HhsDirect Indirect

AirbusDomestic & Foreign Air TravelPolitical Instabilities World-Wide Computer Use

Domestic & Foreign AirlinesPentagonDirect & Hardware- Dependent Software Demand

Direct Boeing or Microsoft Exports

Local Subcontractor & Suppliers

Households of Boeing, Microsoft & Subcontractor Employees

Households of Local service (Non-Basic) or

Employees

Local Shopping Centers and Retail Stores, Restaurants, Education, Health Care,

Suppliers of Non-Basic Activities and other Linked Activities

"Leakages"Imports

Federal TaxesCapital Outflows

Imported Parts and Materials

SavingsE-Commerce PurchasesTaxesTourismInsurance Premiumsother Payments

Imports by Retailers (Cars from Detroit or Stuttgart)Imported Parts and Materials by Local Sector Producers

Export Base Multiplier Relationshipsand Exercise

(http://faculty.washington.edu/krumme/systems/econbase.html)

Employment Multipliers (Economic Base) Employment Multipliers (Economic Base) (http://faculty.washington.edu/krumme/207/development/basemploy.html)(http://faculty.washington.edu/krumme/207/development/basemploy.html)

The simple economic base (employment) multiplier is The simple economic base (employment) multiplier is presented in three different forms, respectively emphasizing presented in three different forms, respectively emphasizing different components and roles of the multiplier different components and roles of the multiplier

Total Employment (T) = Basic Employment (B) + Nonbasic Total Employment (T) = Basic Employment (B) + Nonbasic Employment (N)Employment (N)

Multiplier Effect (ME)Multiplier Effect (ME) = Nonbasic Employment generated = Nonbasic Employment generated (by Basic employment) (by Basic employment) OR:OR:Basic employment multiplied by Nonbasic employment per Basic employment multiplied by Nonbasic employment per basic employee basic employee OR:OR:Basic Employment x Multiplier minus Basic Employment Basic Employment x Multiplier minus Basic Employment OR:OR:Basic Employment x (Multiplier - 1) Basic Employment x (Multiplier - 1)

Multiplier Formulation #1

T = B + N

T

B =

B+N

B

T = B (B + N)

B

T = B T

B

M1 = T

B

(Multiplier: Total employment generated per basic employee)

Multiplier Formulation #2

T

T

T

1 1 1

= = = =

B

B

T

T-N

T

T

T

- N

T

1 - N

T

1

M2 =

1 - N

T

Denominator: "leakage coefficient" (the larger this coefficient, the smaller the multiplier)

N/T = "retention coefficient" (the larger this coefficient, the

larger the multiplier). This coefficient is the equivalent of the "propensity to consume locally" (pcl) x "income generated per local consumption dollar" (iclcs) in the local income multiplier.

Multiplier Formulation #3

T = B + ME

T = B + B N

B

T = B (1 + N

B

)

M3 = (1 + N

B

)

[In this formulation, the emphasis is on the N/B ratio and the role of the "1" in multipliers (namely to isolate and

preserve the basic component in the resulting total employment)]

Multiplier Effect

ME = B N

B

ME = Multiplier EffectB = Basic Employment N = Nonbasic Employment

Economic Base Concept: Income & Employment Multipliers

pcl = .8 (Propensity to consume locally)

icles = .25 (Income created by local consumption sales (per $ of sales)

Multiplier = 1

--------------- 1 - .8 x .25

= 1

----- .8

= 1.25

Employment Multiplier:Definitions: "The employment multiplier associated with a

particular regional economic stimulus is designed to yield an estimate of the total employment attributable to the stimulus per job or man-year of employment directly created." [Davis, Regional Economic Impact Analysis and Project Evaluation, 1990, p.37]

The (basic/non-basic) employment "multiplier is equal to total (or increase in) employment in both basic and service activities divided by total (or increase in) basic employment." [Isard, Methods of Regional Analysis, 1960, p.190]

(1) T = B + N

(2) B = T - N

(3) B --- T

= T - N -------- T

(4) B --- T

= 1 - N/T

(5) B = T (1 - N/T)

(6) T = B ( 1

--------- 1 - N/T

)

^

|

|

MULTIPLIER

simplified further:

M = T --- B

(7) Tt+1 = Bt+1 ( Tt ---- Bt

)

(Application to forecasting next year's total employment)

Where: T = Total Employment B = Basic Employment N = Nonbasic Employment

The Location Quotient & the Multiplier The location quotient (l.q.) is frequently used

to estimate the economic base of a region. How will we do that? If the l.q. for a sector exceeds one, the sector is presumed to export. Thus, we take all sectors with an l.q. of above one and determine, sector by sector: (and then sum the export employment for all these sectors)

The Location Quotient & the Multiplier

Local Service Employment in sectori

=

Total Employment in sectori

------------------------- l.q. i

Export employment for sectori

= Total Employment

in sectori ( 1 -

1 ---- l.q.i

)

Base Multiplier Location Quotient

Movement (Flows in Space)Movement (Flows in Space)

• Three General Types of Movement

• Migration – movement of people from one place to another

– Immigration – people entering (moving into) an area– Emigration – people exiting (moving out of) an area

• Diffusion – the movement of ideas, beliefs, values, or innovations from one place to another.

• Spatial Interaction – the level and intensity of various activities that take place among locations (Example: trade between countries).

– By examining a particular type of spatial interaction, functional regions can be delimited.

Interdependence :

Spatial interaction: all kinds of movements or flows that involve human activity.This includes migration, commuting, telecommunication, cash flows etc.

Spatial Diffusion: the process by which things spread through space and over time.Example, disease outbreaks, political movements, fashion, architectural styles etc.Spatial diffusion does not occur in a completely random manner. Diffusion processes can be predicted and plotted.

Complementarity is essential for diffusion to occur. It can be a result of physical factors or even the world economic system.

Sistem Wilayah

Methods of Intraregional Analysis : Dominant Analytical Questions

(Sumber : Bendavid – Val, 1991)

Basic Statistical Compendium What are the overall economic of the

region’s subareas and town, and how do they compare with each other in terms of important characteristic ?

Income Measures

What are the levels of different types of income in different part of region ?

Social Accounts

What is the relationship between income levels in different parts of the region and the different prevailing production patterns, and in turn, the values of flows across the region’s borders ?

Economic Composition Analysis What are the relative levels on concentration or

specialization in selected characteristics or activities among different parts of region, and what are the associated consequences ?

Indeks KosentrasiIndeks Kosentrasi

Kecenderungan menyebar atau Kecenderungan menyebar atau terkosentarsinya penduduk/aktivitas terkosentarsinya penduduk/aktivitas ekonomiekonomi

nn Σ (Xi – Yi)Σ (Xi – Yi) 11

C = --------------------C = -------------------- 22

Xi = Persentase Luas Sub Wilayah iXi = Persentase Luas Sub Wilayah iYi = Persentase Jumlah Yi = Persentase Jumlah Penduduk/Aktivitas Ekonomi pd Sub Wilayah iPenduduk/Aktivitas Ekonomi pd Sub Wilayah in = Jumlah Sub Wilayah in = Jumlah Sub Wilayah i

Rentang Nilai 0 – 100, Semakin Tinggi Semakin Rentang Nilai 0 – 100, Semakin Tinggi Semakin TerkosentrasiTerkosentrasi

Koefisien DistribusiKoefisien Distribusi

DQ = (Yi/Xi)DQ = (Yi/Xi)

DQ = Koefisien DistribusiDQ = Koefisien Distribusi Xi = Persentase Luas Sub Wilayah IXi = Persentase Luas Sub Wilayah I Yi = Persentase Jumlah Penduduk/Aktivitas Ekonomi Yi = Persentase Jumlah Penduduk/Aktivitas Ekonomi

pd Sub Wilayah Ipd Sub Wilayah I

Semakin Tinggi Nilai DQ Semakin TerkosentrasiSemakin Tinggi Nilai DQ Semakin Terkosentrasi

Natural Resource Assessments What are the natural resources endowment of

different part of the region, and what ate the associated the problems and potentials ?

Linkage Investigations

What are the mayor types of linkages and their magnitudes among central places in the region ?

Flows Studies

What volume of selected goods flow between major points of origin and destination in the region ?

Friction Analysis

What are the major factors inhibiting interaction among central places in the region ?

Extended Commodity Trade System Analysis What are the intraregional marketing chains of

important commodities, particularly rural commodities produced for sale outside the region ?

Economic Base and Accrual Analysis What is relationship between outside demand for

the products of different areas in the region and economic expansion of those areas and of the region as a whole, based on simple multiplier relationships ?

Input - Output Analysis

What are in the interindustry linkages and their multiplier effects among different parts of the region as related to outside demand for the region’s products ?

Rural – Urban Exchange Analysis What are the comparative rural – urban

income multiplication effect associated with different agricultural commodities in different parts of the region ?

Access Studies

What is the degree of access of the population of different parts of the region to functions provided by the region’s central places, and what does this suggest about effective demand for those functions ?

Functional Analysis

What are the functions provided by the region’s settlement system, what sorts of hierarchical networks prevail within it, and what does this suggest about effective supply of those functions ?

Pusat Pelayanan Sektor Ekonomi No Kecamatan Hirarki

A B C D E F G H I J K L M N O

P

1 Purworejo I ■ ■ ■ ■ ■ ■ ■ ■ ■ 9

2 Kutoarjo I ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ 10

3 Pituruh II ■ ■ ■ ■ ■ ■ 6

4 Bagelen II ■ ■ ■ ■ ■ ■ ■ ■ 8

5 Purwodadi II ■ ■ ■ ■ ■ ■ ■ 7

6 Butuh III ■ ■ ■ 3

7 Grabag III ■ ■ ■ ■ ■ ■ ■ 7

8 Banyuurip III ■ ■ ■ 3

9 Bener III ■ ■ ■ ■ ■ ■ 6

10 Bayan III ■ ■ ■ ■ 4

11 Gebang IV ■ ■ ■ ■ 4

12 Ngombol IV ■ ■ ■ ■ 4

13 Kaligesing IV ■ ■ ■ ■ ■ 5

14 Loano IV ■ ■ ■ ■ ■ 5

15 Bruno IV ■ ■ ■ ■ ■ ■ 6

16 Kemiri IV ■ ■ ■ ■ 4

Keterangan : (A). Pusat Pemerintahan Kabupaten, (B) Pusat Wilayah Pembangunan, (C) Pusat Pemerintahan Kecamatan (D) Pelayanan Sosisl-Ekonomi Tingkat Kabupaten (E) Pelayanan Sosisl-Ekonomi Tingkat Kecamatan; (F) Pelayanan Sosial-Ekonomi Tingkat Desa; (G) Perdagangan; (H) Jasa; (I) Industri; (J) Pertanian Tanaman pangan; (K) Perkebunan; (L) Perikanan; (M) Peternakan; (N) Kehutanan (O) Pariwisata; (P) Jumlah Fungsi .

Market Center Studies

What are the major trade functions of the region’s marked centers, and how are they link through trade to other regional market centers and the rural areas of the region ?