Local Currency and the Post-Work Traffic of Residents

Local currency is a type of voucher that can only be used at participating stores in the issuing district or province, issued by local governments in South Korea. We use the micro data from the Household Travel Survey in 2010 and 2016 to analyze how the introduction of local currency is related to changes in residents’ post-work traffic behavior using a Difference-in-Differences model. The results of the linear probability model show that the probability of stopbys when returning home from work increases for local residents following the implementation of local currency. The results of the Poisson regression show that the number of post-work stopbys decreases for local residents after local currency is implemented. This suggests that the traffic behavior of the residents changes from stopbying several places with a low occurrence to stopbying fewer places with a higher occurrence when returning home from work. This result is consistent with the explanation that the residents substitute out-of-town consumption with local consumption when local currency is introduced.