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