A Replication of "The Political Determinants of Federal Expenditure at the State Level" (Public Choice, 2005)

Stratford Douglas () and W. Reed ()

No 14-03, Working Papers from Department of Economics, West Virginia University

Abstract: This paper replicates and analyses a study by Hoover and Pecorino (2005) on federal spending in US states. H&P followed on path-breaking research by Atlas et al. (1995) in which evidence was claimed in favour of the "small state effect;" namely, that since every state is represented by two senators, small states have a disproportionate influence relative to their population size. Using H&P's data, we both replicate their results, and demonstrate strong support for the small state effect when we formally test their predictions. The contribution of this study is that we demonstrate that this empirical support vanishes when we (i) employ cluster robust standard errors rather than conventional OLS standard errors, and (ii) include a variable for population growth as suggested in a recent study by Larcinese et al. (2013). Our results lead us to conclude that there is no evidence to support the hypothesis of a "small state effect."

Keywords: Small state effect; Representation; US Senate; Replication study (search for similar items in EconPapers)
JEL-codes: C1 H1 H5 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2014
New Economics Papers: this item is included in nep-cdm and nep-pol
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Working Paper: A Replication of "The Political Determinants of Federal Expenditure at the State Level (Public Choice, 2005) (2013)
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