Table 5.10 Output Multiplier
Sector Initial
First Round
Industry Sup
Consum ption
Total Elasticit
y Type I
Type II Agriculture
1.00000 0.31337
0.14298 0.09004
1.54639 0.28268
1.45635 1.54639
Wood 1.00000
0.19147 0.04388
0.05234 1.28769
0.13307 1.23535
1.28769 Other forest
products 1.00000
0.07442 0.03342
0.02440 1.13224
0.21630 1.10784
1.13224 Mining and
Quarrying 1.00000
0.08907 0.00898
0.09142 1.18948
0.77975 1.09806
1.18948 Industry Food
Products, Beverages and
Tobacco Products
1.00000 0.68111
0.54958 0.06461
2.29529 0.90536
2.23068 2.29529
Industry Textiles and Wearing
Apparel 1.00000
0.45119 0.50419
0.22956 2.18494
1.05412 1.95537
2.18494 Industry Wood
and Furniture 1.00000
0.62359 0.28563
0.20479 2.11401
1.31671 1.90922
2.11401
Pulp Industry 1.00000
0.46511 0.40444
0.07762 1.94717
1.03776 1.86955
1.94717 Paper Industry
1.00000 0.29373
0.02950 0.32036
1.64358 0.60063
1.32322 1.64358
Industry of Paper Products
1.00000 0.46719
0.19754 0.23789
1.90262 0.37883
1.66473 1.90262
Mining Industry 1.00000
0.21378 0.02096
0.39998 1.63472
0.69831 1.23474
1.63472 Industry
Fertilizer and Chemical
Products 1.00000
0.40862 0.04597
0.32424 1.77883
0.49757 1.45459
1.77883 Industry non-
metallic Products 1.00000
0.72688 0.39435
0.10504 2.22627
1.78698 2.12123
2.22627 Industry
Fabricated Metal Products
1.00000 0.39166
0.24667 0.42587
2.06419 0.42115
1.63832 2.06419
Other Industries 1.00000
0.32895 0.21492
0.49622 2.04009
1.02362 1.54387
2.04009 Electricity, Gas,
and Water Supply
1.00000 0.61191
0.10264 0.21041
1.92496 0.00000
1.71455 1.92496
Construction 1.00000
0.52394 0.05159
0.26882 1.84435
1.70090 1.57553
1.84435 Trade, Hotels
and Restaurants 1.00000
0.31997 0.14978
0.14436 1.61412
0.31018 1.46976
1.61412 Transport and
Communications 1.00000
0.46054 0.18046
0.35586 1.99686
0.34468 1.64100
1.99686 Financial
Institutions, Leasing and
Corporate Services
1.00000 0.26848
0.14105 0.10549
1.51502 0.03712
1.40953 1.51502
Services 1.00000
0.59769 0.27897
0.17505 2.05172
1.62723 1.87666
2.05172 Others
1.00000 0.00000
0.00000 0.00000
1.00000 1.00000
1.00000 1.00000
Source: Riau Province Input- Output Table, 2010 calculated
5.4.2 Income Multiplier Household income is the result of the impact of additional final demand of
a sector, which in turn increases the output of the sector. With an increase in
output of a sector, it will increase the demand for the input and primary input is used, which is then pushed up production in the sectors of the economy. Increase
in primary input will increase the acceptance of wages or salaries for the household. Income multiplier effect explains the effect of a final demand to the
changes in household income. The income multiplier values in Riau economy showed the largest value in the industry of food, beverages and tobacco products
by 5.61301 for Type I, and for Type II of 6.01617. The initial effect of pulp industry is 0.02226 while for paper industry is
0.15736, which indicates initial impact from the injection to the final demand. The first round effect of pulp industry is 0.01035 while for paper industry amounted to
0.01308. These indicate if the final demand in paper industry increased for one million rupiah, through local government spending or export, the direct effect on
total economic output of Riau Province is 0.01308 million rupiah while if the final demand in pulp industry increased for one million rupiah, the direct effect on total
income of all sectors in Riau Province is 0.001035 million rupiah. Industrial Support Effects of pulp industry is 0.00900 while for paper industry is 0.00131,
which indicates if there was an increase of one million rupiah in final demand of pulp industry or paper industry, it will bring indirect effect of the increase on total
economic income of all sectors in Riau Province by 0.00900 million rupiah or 0.00131 million rupiah. Consumption column shows that pulp industry amounted
to 0.00299 while paper industry amounted to 0.01234, which indicates if final demand were injected one million rupiah in pulp industry or paper industry,
households will receive the additional revenue of 0.00299 million rupiah or 0.01234 million rupiah. Furthermore, pulp industry has a total impact of 0.04461
million rupiah as the result of the initial injection of 1 million rupiah while paper industry paper industry has a total impact of 0.18409 million rupiah. Paper
industry has the higher value of total income multiplier than pulp industry. Pulp industry has flow-on effect of 0.02235 while paper industry has flow-
on impact of 0.02673 billion rupiah. The elasticity of income in pulp industry and paper industry amounted 1.06796 and 0.42751. For the income multiplier Type I,
pulp industry has a value of 1.86955, which suggests that any increase in final demand in pulp industry for one million rupiah, the household income of all
sectors in the economy of Riau Province will be increase by 1.86955 million rupiah, either directly or indirectly. Meanwhile paper industry has a value of
income multiplier Type I of 1.09145. This suggests that any increase in final demand in the paper industry for one million rupiah, the household income of all
sectors in the economy of Riau Province will be increase by 1.09145 million rupiah, either directly or indirectly. If it viewed from the income multiplier of
Type II, by include household as the endogenous variable, paper industry income multiplier would be 1.16984 while pulp industry income multiplier is 2.00383.
Although the value of paper industry ranked twentieth in Riau Province, this value indicates if there was an increase in household consumption who worked in paper
industry for one million rupiah, the total income off all sectors in the economy of Riau Province will be increase by 1.16984, and as for pulp industry the value
indicates an increase in household income in the paper industry sector that will be devoted to all other economic sectors will increase by 1.16984 million rupiah if
there was an increase in household consumption who worked in pulp industry for one million rupiah.
Table 5.11 Income Multiplier
Sector Initial
Round First
Round Industry
Sup Consum
ption Total
Elasticit y
Type 1 Type 2
Agriculture 0.02608
0.01422 0.00797
0.00347 0.05174
0.36267 1.85101
1.98396 Wood
0.02261 0.00422
0.00123 0.00202
0.03007 0.13748
1.24115 1.33030
Other forest products
0.00484 0.00572
0.00252 0.00094
0.01402 0.55308
2.70113 2.89514
Mining and Quarrying
0.04461 0.00400
0.00041 0.00352
0.05254 0.77201
1.09875 1.17767
Industry Food Products,
Beverages and Tobacco
Products 0.00617
0.01202 0.01644
0.00249 0.03713
2.37304 5.61301
6.01617 Industry Textiles
and Wearing Apparel
0.09768 0.00929
0.01611 0.00884
0.13192 0.65154
1.25997 1.35047
Industry Wood and Furniture
0.07433 0.02512
0.01035 0.00789
0.11768 0.98610
1.47711 1.58320
Pulp Industry 0.02226
0.01035 0.00900
0.00299 0.04461
1.06796 1.86955
2.00383 Paper Industry
0.15736 0.01308
0.00131 0.01234
0.18409 0.42751
1.09145 1.16984
Industry of Paper Products
0.05401 0.05883
0.01470 0.00916
0.13670 0.50393
2.36129 2.53089
Mining Industry 0.20397
0.00954 0.00094
0.01540 0.22985
0.48138 1.05137
1.12689 Industry
Fertilizer and Chemical
Products 0.15382
0.01792 0.00209
0.01249 0.18632
0.33882 1.13013
1.21130 Industry non-
metallic Products 0.02051
0.01860 0.01720
0.00404 0.06036
2.36234 2.74584
2.94307 Industry
Fabricated Metal Products
0.14769 0.05317
0.02746 0.01640
0.24472 0.33807
1.54593 1.65697
Other Industries 0.22651
0.02820 0.01133
0.01911 0.28515
0.63166 1.17454
1.25891 Electricity, Gas,
and Water Supply
0.07695 0.03082
0.00504 0.00810
0.12091 0.00000
1.46593 1.57122
Construction 0.11844
0.02337 0.00231
0.01035 0.15448
1.20280 1.21683
1.30424 Trade, Hotels
and Restaurants 0.03703
0.02945 0.01091
0.00556 0.08296
0.43047 2.09000
2.24011 Transport and
Communications 0.11586
0.06272 0.01221
0.01370 0.20449
0.30466 1.64675
1.76503 Financial
Institutions, Leasing and
Corporate Services
0.03256 0.01514
0.00886 0.00406
0.06062 0.04563
1.73723 1.86201
Services 0.03701
0.03796 0.01888
0.00674 0.10059
2.15558 2.53576
2.71790 Others
0.00000 0.00000
0.00000 0.00000
0.00000 0.00000
0.00000 0.00000
Source: Riau Province Input- Output Table, 2010 calculated
5.5 Key Sectors in The Economy of Riau Province
