Presentation on theme: "John G. Matsusaka Journal of Political Economy June 1995 Presented by: Aaron Phillips."— Presentation transcript:
John G. Matsusaka Journal of Political Economy June 1995 Presented by: Aaron Phillips
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.
OLS Regression First model: Second model: Final Equation used for Regression:
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
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)
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