An empirical test of neutrality and the crowding-out hypothesis

This paper tests Warr's neutrality hypothesis that the voluntary provision of a public good is independent of the distribution of income. Specifically, I test the null hypothesis of neutrality against the alternative that total contributions to a public good will be larger the less equally income is distributed. To test this hypothesis, a new data set is constructed by merging data on total voluntary contributions to individual public radio stations with 1990 Census data on the income distribution in each station's listening area. I find that voluntary contributions increase as income inequality rises.     

The ruthless Fed: A critique of the AST hypothesis

This paper examines the hypothesis that the Great Contraction was the result of rational rent-seeking by members of the Federal Reserve System. In contrast to the AST hypothesis, evidence on the share prices of member banks that survived the contraction suggests that the owners of these banks suffered an absolute decline in real wealth and a decline relative to a broad spectrum of other investment alternatives. Furthermore, monetary surprises had no statistically discernible effect on the share prices of these banks. This evidence conflicts with the notion that rational rent-seeking would lead the owners of member banks and their bureaucratic conspirators in the Federal Reserve System to unleash a policy with the goal of contracting the money supply by 35 percent.     

The decline of partisanship in the United States: A reexamination of the neutrality hypothesis

The neutrality hypothesis suggests that the erosion of partisan loyalties in the United States does not reflect a growing sense of alienation from the party system, or a loss of public confidence in political parties generally. Instead, we are told that many independents simply regard the parties as irrelevant in the search for solutions to our most important national problems. The following report challenges the assumption that such beliefs necessarily lead citizens to express neutral feelings toward either the Democrats or the Republicans, or toward both. Data from the CPS election studies show, first, that aggregate levels of neutrality are about the same today as they were 20 years ago and, second, that there is a relationship between nonpartisanship and negative views concerning the parties' capacity to serve as representative (or linkage) institutions in democratic politics. It is our contention that, to some degree, this relationship can help us to account for the weakening of partisan attachments since 1964. If we are correct, a restoration of the parties' mass base will be even more difficult to achieve than the neutrality hypothesis implies.     

Testing the Mill hypothesis of fiscal illusion

According to the “Mill hypothesis”, the tax burden from indirect taxation is underestimated because indirect taxes are less “visible” than direct taxes. We experimentally test the Mill hypothesis and identify tax framing as a cause of fiscal illusion. We find that the tax burden associated with an indirect tax is underestimated, whereas this is not the case with an equivalent direct tax. In a referendum to tax and redistribute tax revenue, fiscal illusion is found to distort democratic decisions and to result in “excessive” redistribution. Yet, voters eventually learn to overcome fiscal illusion.     

Imperfect information and the Meltzer-Richard hypothesis

Standard majority-voting models predict that redistribution is positively linked to the mean-to-median income ratio but empirical evidence is mixed. This paper shows that the different empirical reactions to rising mean-to-median income ratios can be rationalized in a simple Romer-Roberts-Meltzer-Richard framework with imperfect information. In such a model, it is important to consider the source of rising mean-to-median ratios. Income growth of the poor can lead to less redistribution as more agents perceive themselves to be rich, which tends to reduce the support for redistribution. An empirical application reveals that the model can explain a substantial part of the first Reagan tax cut.     

A test of candidate equilibrium

Richard McKelvey predicts that candidates will converge to an equilibrium if candidates and voters maximize their utility and voters' preferences conform to stringent assumptions. Although there are discrepancies between electoral data and the requirements of the theory, an analysis of 1972 and 1976 survey data lends support to basic components of the theory. First, most voters did choose the candidate who provided the greater utility. Second, voter distribution was not asymmetrical enough to allow a candidate to win by moving away from the median toward a concentration of voters. Third, the winning strategy for a candidate was to locate at or near the median. While formal theories' predictions will not hold in their precisely stated form, the assumptions can be robust enough to offer an explanation of electoral choices.     

A test of the revealed-preference phenomenon in congressional elections

This study tests for the existence of a revealed-preference phenomenon in recent congressional elections. A revealed-preference analysis predicts that if candidate one defeats incumbent candidate two, then candidate one has been revealed preferred to candidate two, and can expect to secure higher pluralities in subsequent reelection contests than candidate two would have expected. I collect data on incumbents in 1946–1980 congressional elections to examine this prediction. The data provide qualified support for the presence of a revealed-preference phenomenon. The essay closes with a discussion of the possible connection between the revealed-preference phenomenon and the recent electoral experience of congressional incumbents.     

Group size and the free-rider hypothesis: A re-examination of old evidence from churches: Comment

Public Choice - This paper comments on a recent study by Lipford (1995) which rejects the hypothesis of free ridership. This paper contends that Lipford's analysis suffers from two serious...