The Influence of Population and Government Expenditures on Original Regional Income (PAD) of North Sumatra Province

Abstract

This study aims to explore the influence of population and government expenditure on local own-source revenue (PAD) in North Sumatra Province. Local own-source revenue (PAD) is a key element in the implementation of regional autonomy, involving sources of revenue from taxes, levies, management of regional assets, and other legal revenues. This study applies quantitative research methods with a focus on data published by BPS (Central Bureau of Statistics) related to population, government expenditure, and local own-source revenue in North Sumatra Province during the 2018-2022 period. The purposive sampling technique was used to select 45 samples that were considered to represent specific characteristics of the target population, in accordance with the research objectives. Data collection was carried out through the documentation method, utilizing secondary data sources from literature and manuals. Data analysis was conducted using Eviews 12 Software with the application of Panel Data Tests such as the Chow Test and Hausman Test. Data related to PAD in North Sumatra Province shows a decline in 2021, influenced by policies to limit business operations during the COVID-19 pandemic, especially in the hospitality, restaurant and entertainment sectors. An increase in population in a region is generally considered to increase PAD revenue through increased consumption and economic activity. However, data analysis shows that population growth does not always have a positive impact on PAD in all regions in North Sumatra.