Political Parties and the Tax Level in the American States: A Regression Discontinuity Design

Leandro de Magalhaes

Bristol Economics Discussion Papers from School of Economics, University of Bristol, UK

Abstract: With a regression discontinuity design I show that the partisan identity of the majority in the state House of Representatives has no causal effect on the tax level. This result goes against recent findings in the political economy literature. In the state Senate I find a significant discontinuity in the tax level, but I also find a discontinuity in the density of the forcing variable - which implies that we can not interpret the discontinuity in the Senate as a causal relation. Another contribution of the paper is to investigate under which conditions slim majorities in the American states (as opposed to close election) are appropriate for a regression discontinuity design.

Keywords: Regression discontinuity design; Democrats; Republicans; divided government; line item veto; tax level. (search for similar items in EconPapers)
JEL-codes: D72 H1 H2 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2011-07
New Economics Papers: this item is included in nep-acc, nep-cdm and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bri:uobdis:11/622

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