lxx Glejser test suggests that regressing the residual absolute value to the
independent variable Gujarati 2004.
c. Autocorrelation test
Autocorrelation is to seek the interrupting variable or relation in the regression model. Kendall and Buckland 1971 cited on Gujarati 2006
defined the term autocorrelation as correlation between members of observations ordered in time as in time-series data or space as in cross-
sectional data. Because of that Gujarati 2006 suggests, autocorrelation can occur in cross-sectional data also, in which case it is called spatial correlation.
In this case the correlation in space rather than in time. So that the study uses Durbin-Watson Test and Langrange Multiplier test or Breusch-Godfrey test.
LM test or BG test used for sample 100 observation. This test is more precise than DW test particularly for big amount sample Ghozali 2005.
d. Multicolinearity test
It defines the perfect linear relation between or among all independent variable in regression model Gujarati 2004. The method in this test is using
Variance Inflation Factor VIF.
lxxi
CHAPTER IV DATA ANALYSIS AND DISCUSSION
This chapter explains about analysis results toward data which used in this research and analysis results discussion.
A. Data Description
The analysis targets of this study are 33 provinces in the Indonesian’s local governments which consist of 369 regencies and 86 municipalities
http:www.djpkpd.or.id while the sample is regencies and municipalities in all
provinces which have completed data. We analyzed data for year 2006 only. While a few preceding studies tried to analyze the time-series analysis focusing on
specific events related to local governments, but in this study tries to analyze of data in year 2006 by cross-section analysis. According to Undang-Undang No. 34
year 2004 about financial balance between central government and local government, the relative fiscal importance between a central government and a
local government has been kept to a steady level. However, such analysis is expected to draw a significant result because there are large differences between
inter-regions relatively. The scope of our study limited in year 2006 because it was the latest period available to get data and the maximum accumulation of
experience on a local self-governing system after the implementation of Undang- Undang No. 34 year 2004.
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