Developing rules of thumb for the financial conditions of city livability: a study of municipal governments in Indonesia

Figures & data

Table 1. Research variables and their measurement

Variables	Measurement (unit)
City livability	Index of city livability (index)
Operating capacity	Ratio of operating surplus or deficit to operating revenues (times)
Financial flexibility	Ratio of (Total Revenues—Special Allocation Fund Revenues—Payment of Principal Payable—Operating Expenses) to (Payment of Principal Payable + Operating Expenses) (times)
Commitment to maintain services	Ratio of maintenance expenditure to depreciation of fixed assets expense (times)
Commitment to improve services	Ratio of capital expenditure to population (Indonesia Rupiah (IDR) per capita)
Capacity to serve community	Ratio of total fixed assets (book value) to population (Indonesia Rupiah (IDR) per capita).

Table 2. Data and standardized-data

No	Municipal Government	Commitment to Maintain Services		Commitment to Improve Services		Operating Capacity		Financial Flexibility		Capacity to Serve Community		City Livability Index
		Xi	z-score	Xi	z-score	Xi	z-score	Xi	z-score	Xi	z-score	Xi	z-score
1	Kota Surakarta	0.32	0.65	3,426,349.76	1.08	1.21	1.03	0.21	1.11	12,447,341.98	0.69	66.90	1.36
2	Kota Palembang	0.63	2.55	1,935,709.81	(0.77)	1.26	1.43	0.16	0.59	7,268,230.86	(0.28)	66.60	1.27
3	Kota Balikpapan	0.13	(0.46)	2,768,407.34	0.26	1.15	0.51	0.15	0.58	10,443,426.27	0.32	65.80	1.03
4	Kota Denpasar	0.24	0.21	2,151,713.13	(0.51)	1.12	0.20	0.12	0.25	2,785,766.35	(1.12)	65.50	0.94
5	Kota Semarang	0.23	0.12	2,462,864.61	(0.12)	1.25	1.34	0.25	1.42	16,261,218.16	1.41	65.40	0.91
6	Kota Tangerang Selatan	0.07	(0.85)	1,804,143.18	(0.94)	1.33	2.01	0.33	2.13	10,888,514.98	0.40	65.40	0.91
7	Kota Banjarmasin	0.10	(0.65)	1,898,195.35	(0.82)	1.06	(0.30)	0.06	(0.27)	4,908,494.00	(0.72)	65.10	0.82
8	Kota Pekalongan	0.16	(0.30)	3,061,492.42	0.63	1.03	(0.55)	0.03	(0.53)	6,645,173.77	(0.40)	64.70	0.70
9	Kota Yogyakarta	0.36	0.94	3,512,676.35	1.19	1.14	0.38	0.14	0.44	7,236,448.71	(0.29)	63.60	0.38
10	Kota Bandung	0.44	1.41	2,218,515.30	(0.42)	1.03	(0.55)	0.03	(0.53)	8,404,414.03	(0.07)	63.60	0.38
11	Kota Malang	0.43	1.36	2,105,751.62	(0.56)	1.12	0.22	0.12	0.27	5,844,841.48	(0.55)	63.50	0.35
12	Kota Surabaya	0.25	0.25	2,752,430.48	0.24	1.24	1.22	0.24	1.31	12,664,010.95	0.74	63.20	0.26
13	Kota Bogor	0.55	2.05	2,077,307.34	(0.60)	0.97	(1.07)	(0.03)	(1.07)	6,091,365.10	(0.50)	63.20	0.26
14	Kota Palangka Raya	0.16	(0.32)	3,994,915.79	1.79	1.09	(0.08)	0.08	(0.05)	9,409,409.64	0.12	62.90	0.17
15	Kota Manado	0.15	(0.37)	3,594,309.34	1.29	1.06	(0.29)	0.06	(0.26)	5,817,147.83	(0.55)	62.50	0.05
16	Kota Pontianak	0.19	(0.14)	2,412,161.73	(0.18)	1.06	(0.30)	0.06	(0.26)	3,283,481.80	(1.03)	62.00	(0.10)
17	Kota Depok	0.06	(0.87)	1,185,252.69	(1.71)	1.22	1.12	0.22	1.21	3,405,560.03	(1.01)	61.80	(0.16)
18	Kota Mataram	0.03	(1.11)	3,014,685.38	0.57	0.90	(1.69)	(0.10)	(1.70)	4,812,131.35	(0.74)	61.60	(0.22)
19	Kota Tangerang	0.25	0.23	1,820,677.34	(0.92)	1.12	0.23	0.12	0.28	2,889,467.88	(1.10)	61.10	(0.36)
20	Kota Banda Aceh	0.14	(0.39)	4,714,050.95	2.68	1.09	(0.05)	0.09	(0.03)	20,422,709.43	2.20	60.90	(0.42)
21	Kota Pekanbaru	0.03	(1.06)	1,989,955.53	(0.71)	0.92	(1.52)	(0.08)	(1.53)	4,070,967.65	(0.88)	57.80	(1.34)
22	Kota Samarinda	0.05	(0.96)	2,706,790.58	0.18	1.07	(0.25)	0.07	(0.21)	20,046,203.45	2.12	56.90	(1.61)
23	Kota Bandar Lampung	0.03	(1.06)	2,173,201.99	(0.48)	1.04	(0.47)	0.03	(0.56)	3,555,335.81	(0.98)	56.40	(1.76)
24	Kota Medan	0.15	(0.35)	1,955,938.54	(0.75)	1.03	(0.56)	0.03	(0.54)	12,552,579.18	0.71	56.10	(1.85)
25	Kota Makassar	0.06	(0.89)	2,225,385.59	(0.41)	0.86	(2.00)	(0.14)	(2.04)	16,814,790.59	1.52	55.70	(1.97)

Table 3. Results of Pearson correlation tests

Indicators of a City’s Financial Condition		Livability Index
Commitment to maintain services	Pearson Correlation	0.505*
	Sig. (2-tailed)	0.010
Operating capacity	Pearson Correlation	0.612**
	Sig. (2-tailed)	0.001
Financial flexibility	Pearson Correlation	0.593**
	Sig. (2-tailed)	0.002
Capacity to serve community	Pearson Correlation	−0.190
	Sig. (2-tailed)	0.362
Commitment to improve services	Pearson Correlation	0.104
	Sig. (2-tailed)	0.620

** Significant at the 5% level

Table 4. Comparison of the mean values of financial condition indicators

Indicators of Financial Condition (1)	Municipal Governments in the Top-half(2)	Municipal Governments in the Bottom-half (3)	Absolute Difference (%)(4) = [(2)-(3)]*100%
Commitment to maintain services	0.28	0.14	100.00%
Operating capacity	1.16	1.03	12.62%
Financial flexibility	0.15	0.03	400.00%
Capacity to serve community	Rp8,816,490 per capita	Rp8,705,473 per capita	1.28%
Commitment to improve services	Rp2,508,187 per capita	Rp2,604,972 per capita	3.72%

Table 5. Results of mean difference test

		F	Sig.	t	df	Sig. (2-tailed)
Commitment to maintain services	Equal variances assumed	7.776	0.010	3.538	23	0.002*
	Equal variances not assumed			3.642	16.471	0.002*
Operating capacity	Equal variances assumed	0.237	0.631	2.606	23	0.016*
	Equal variances not assumed			2.612	22.985	0.016*
Financial flexibility	Equal variances assumed	0.024	0.879	2.535	23	0.019*
	Equal variances not assumed			2.536	22.880	0.019*
Capacity to serve community	Equal variances assumed	6.851	0.015	−0.146	23	0.885
	Equal variances not assumed			−0.143	16.782	0.888
Commitment to improve services	Equal variances assumed	2.999	0.097	−0.532	23	0.600
	Equal variances not assumed			−0.521	17.195	0.609

*Significant at the 5% level