1. California Expenditure VS. Immigration By: Daniel Jiang, Keith Cochran, Justin Adams, Hung Lam, Steven Carlson, Gregory Wiefel Fall 2003

2. Introduction What: Economic significance of relationship between California Immigration and California Expenditure Why: Recent California budget crisis How: Propose hypothesis, gather data and run regression. Evaluate regression to see if H 0 is rejected.

3. Original Hypothesis H 0 : (m = 0); No relationship between Immigration and Expenditure. H 1 : (m  0); Correlation exists: Expenditure dependent on level of Immigration.

4. Data

5. Immigration VS Expenditure

6. Regression Dependent Variable: CAEXPENDITURES Method: Least Squares Sample: 1 19 Included observations: 19 VariableCoefficientStd. Errort-StatisticProb. CAIMMIGRATION0.2363120.0742623.1821280.0055 C814.955714972.460.0544300.9572 R-squared0.373294 Mean dependent var47463.47 Adjusted R-squared0.336429 S.D. dependent var16294.13 S.E. of regression13273.18 Akaike info criterion21.92418 Sum squared resid3.00E+09 Schwarz criterion22.02359 Log likelihood-206.2797 F-statistic10.12594 Durbin-Watson stat0.388539 Prob(F-statistic)0.005453

7. Actual, Fitted, Residual Graph

8. Result of Regression R 2 : Significant ratio between Explained and Unexplained. (~37%) F-stat: Significant F-stat value of 10.125 T-stat: Value indicates that regression was significant (3.182) Residual: Show signs of autocorrelation; when it is positive it tends to stay positive, and when it is negative it also tends to stay negative

9. General Trend Positive slope indicates that an increase in immigration would result in an increase in expenditure.

10. Conclusion Result of the regression helps support the alternative hypothesis – there is a significant correlation between California Immigration & Expenditure. This confirms our initial hypothesis that there is a positive relationship between California Immigration & Expenditure.

11. Arnold: “They keep coming!!” Currently, $3 billion spent annually on the 2.5 million illegal immigrants residing in California Only $220 million received from federal government to offset these costs This analysis supports Arnold’s policy to curb illegal immigration