John G. MatsusakaJournal 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