Local Demand for Public Goods Revisited
This paper is trying to find positive correlation between demand for local goods and local tax burdens in Korea.
And this study analyze the possibility that demand for local public goods might be affected by the fiscal equalization scheme.
The panel data is used to analyzethem. Panel data has the characteristic of time series, so we test if there is unit-root in the
data for this analysis and if variables are cointegrated or not. Finally, the test results show that time series data has unit-root
and variables are cointegrated. So the panel error correction model is used to estimate the local demand function for public
Keywords - Panel Cointegration, Panel Unit-root, Tax Price Function.