Constructing Input-Output (I-O) models from less than perfect datasets: An economic impact analysis of garage construction project in Gresik, East Java Province, Indonesia

This paper demonstrates techniques to construct input-output (I-O) models to perform impact analysis under a situation of data limitation. Of policy makers' main interests regarding project proposals is to have some idea on the economic impact of the projects. I-O based model is an useful analytical tool to do impact analysis. However, the I-O table from which the analysis is based on is often not available for the region of interest, in this case, Gresik, a municipal in East Java. This paper shows how to derive the I-O table for Gresik out of the East Java's I-O table with four approaches, namely: 1) location quotient (LQ); 2) cross-industry location quotient (CIQ); 3) Flegg location quotient (FLQ); and 4) augmented Flegg location quotient (AFLQ). We suggest that these approaches are suitable for a situation facing time and cost constraints, which is a typical one in city/municipal-level policy domain.