Abstract
One of problems in making a government’s balance sheet is to determine the value of infrastructure run by the government. It is because the infrastructure is valueless and closely similar in characteristics to public goods. In general, most researchers would use travel cost method to value government infrastructure. Yet, this method is very sensitive toward respondents’ characteristics and in many cases, it results in over estimated valuation. Meanwhile, a valuation technique using cost approach for government infrastructure reflects less its benefits and in many cases, it also tends to be undervalued.Against the aforementioned issue, this research attempted to evaluate state-owned infrastructure using a capitalization method. The object of this research was Sapon Dam located in Kulon Progo Regency, Indonesia. This dam is a state-owned asset functioned to sustain agricultural development particularly for irrigating paddies. This research was aimed at estimating the value of Sapon Dam using a capitalization method. In this method, the absence of infrastructure value was replaced with difference-in-differences analysis for proxy income.The data used in this research was secondary data which included paddy planting areas in irrigated and rain-fed fields, and also farmers’ net income. It was found that the estimated value of Sapon Dam per December 15th2015 was IDR 96,659,385,018.72.
Highlights
1.1 BackgroundDevelopment programs and government policies are designed to reform the existing condition (Gertler et al, 2011)
The calculation of net impact of the dam toward the area of rice field irrigation was based on the assumption that irrigation was only used during the planting season
This research applied difference-indifferences method as income approach to conduct economic valuation of public assets. It was conducted in Sapon dam which provided an impact on the expansion of irrigated rice field area utilized for planting paddy
Summary
1.1 BackgroundDevelopment programs and government policies are designed to reform the existing condition (Gertler et al, 2011). The development program of government public assets in agriculture is expected to generate reformation such as increasing planting areas, increasing planting intensity, improving agricultural production, reducing cost of production and many others. This development is one of government’s efforts to achieve food sovereignty. One of methodology used in impact evaluation is difference in differences This method identifies the program impact by comparing participants (with treatment) and non participants (without treatment), and before and after intervention (Khandker et al, 2010). This method calculates the comparison between the average result of the areas affected by the program (participants) and the areas not affected by the program (non participants) before and after the program implementation
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