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John G. MatsusakaJournal of Political Economy
June 1995
Presented by: Aaron Phillips
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How does the initiative impact state and local government finances?
To what degree is this impact?
Matsusaka is not concerned with the social or regulatory impacts of the initiative.
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OLS Regression First model:
Second model:
Final Equation used for Regression:
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Variables for vector :• Dummy for initiative• % signature requirement
Variables for vector :• Income per capita• Population density• Metropolitan population• Population growth rate• Value of mineral production• Measure of “conservativeness” of state’s U.S.
Senators
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Governmental Finances – U.S. Bureau of the Census
State and Metropolitan Area Data Book – U.S. Bureau of the Census
Minerals Yearbook – Bureau of Mines Initiative information - Magleby
(1984)
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Elected representatives spend more than the median voter wishes.
States with the initiative:• Lower spending per capita (roughly 4%)• Reduction of state general spending, increase
in local.(-12% and +10%)• Reduction in taxes, increase in fees and
charges (-8% and +7%)• Overall reduction in state government
redistribution