The change in world price and export tax of crude palm oil and their impact on the economy and welfare in Indonesia: using a computable general equilibrium (CGE) model

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Sadik Ikhsan, Ratya Anindita, Nuhfil Hanani and Djoko Koestiono
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Russian Journal of Agricultural and Socio-Economic Sciences, 2016, vol. 52, issue 4, pages 37-46

Abstract: The research aimed to analyze the impact of change in world price and export tax of crude palm oil on the export and domestic production performance of some selected economic sectors, as well as households’ welfare in Indonesia. The analyses were carried out by a Computable General Equilibrium (CGE) static model with data taken from Indonesian Social Accounting Matrix (SAM) 2008. The results showed that the increase in world price accompanied by the increase in export tax of crude palm oil and rupiah depreciation have positive impact on the export and domestic production performance of palm oil manufacture sectors and other related economic sectors. Prevailing progressive tax on crued palm oil export does not have negative impact resulted in decreasing palm oil export because export unit price received by producers remains higher than the price at baseline. Due to the increasing of export performance and domestic production, production sectors have economic ability to meet the demands of paying higher value-added upon primary production factors owned by households so that households’ factor income increase and eventually, it leads households’ welfare increase as well.

Keywords: SOCIAL ACCOUNTING MATRIX; COMPUTABLE GENERAL EQUILIBRIUM; CRUDE PALM OIL; EXPORT TAXES; EXPORTS; DOMESTIC PRODUCTION; WELFARE (search for similar items in EconPapers)
Date: 2016
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