For the first regression, the dependent variable is the sum of total debt and unfunded liabilities per capita for that state. The argument is that better managed states should look for the best long term fiscal health of the state and keep their debt down. A poorly run state government will use the promises of debt and unfunded liabilities to buy votes to keep themselves in power and thus run up their debts. The data for debt and unfunded liabilities comes from the Forbes website. The debt numbers are as of January 2010.

The results of the regression are below. The data shows coefficient, then p-value.

Debt plus Unfunded Liabilities | Intercept | Democrat Control |

9793.0 (2.01e-14) *** | 2362.9 (0.1) |

The regression image is below:

As the chart shows, there is a slight increase in the regression line as the democrats gain a larger percentage of state power. However, the p-value for the regression is above 10% (barely). Thus, no conclusions can be made concerning Democrat control over the state House and Senate and the state's debt burden.

For the second regression, I use internal migration as the dependent variable. This is taken from the 2010 U.S. census. The data shows whether more people moved into the state or left the state due to internal migrations between 2000 and 2010. The argument is that better run states should experience an inflow of people while poorly run states should experience an outflow. I believe this is one of the best ways to judge the quality of government because it reflects the voluntary movement of people. The independent variable is the same.

The regression results are:

Internal Migration | Intercept | Democrat Control |

0.02689 (0.0131) * | -0.03412 (0.0420) * |

Adjusted R-squared: 0.0656

The results show that a state entirely controlled by the Republicans will have an inflow of people of 2.69%, while a state entirely under the control of the Democrats will have an outflow of .7% (.02689 - .03412). The result is statistically significant at the 5% level.

The chart for this regression is below:

References:

http://www.forbes.com/lists/2010/44/debt-10_Global-Debt-Crisis_StateName.html

http://www.census.gov/

## No comments:

## Post a Comment