John E. Filer

Why Some States Adopt Lotteries and others Don'T:

In 1963, New Hampshire reintroduced the state-sponsored lottery in the United States. By late 1986, more than half of the 50 states had lotteries in operation or had approved lotteries through referenda. Of the scholarly journal articles that have analyzed the economics of state lotteries, most have been concerned with the regressivity of the implicit lottery tax. In this article, we address the more important question of why any such regressive tax, especially one in the form of legalized gambling, would be adopted in lieu of higher sales, property, or income taxes. Using a model of rational legislator behavior developed from public choice theory, we generate and test empirical models that explain the pattern of lottery adoption across states and the timing of such adoptions. In general, a given state will have a higher probability of adopting a lottery as an alternative source of state revenue, and will tend to adopt a lottery earlier, the greater the overall tax burden on the voters of the state, the greater the expected return from a lottery in the form of spendable revenue, the greater the difficulty in raising tax rates on other bases, and the fewer the number of poor people in the state.

Voter turnout and the benefits of voting

A model of voting behavior is developed that predicts that individuals vote if the absolute value of voting for or against a referendum exceeds the cost of voting. The results obtained from examining voting on city-county consolidation referenda and in New York state (1) provide support for the relatively untested prediction that turnout rises as the absolute value of the mean gains resulting from an electoral outcome increase and (2) augment the evidence that turnout rises as the probability of altering an electoral outcome increases and falls as the cost of voting rises.

Voter Reaction to City-County Consolidation Referenda

T HERE have been few studies on voting behavior in which explicit predictions from economic theory have been tested. Two major reasons are the inability (1) to identify precisely the beneficiaries of alternative election outcomes and (2) to directly link the beneficiaries, when known, one to one with a turnout population, so that a usable sample can be obtained. One aspect of these problems that can be surmounted, and which is the subject of our investigation, is the urban-suburban conflict that has been so prevalent in recent years: city-county consolidation. The property tax structure of local government in the United States enables communities to expropriate wealth from their richer residents. Our model, which incorporates this feature of property taxation, predicts that the median voter in a wealthy (for example, suburban) community is made unambiguously worse off, ceteris paribus, from merger with a poorer (for example, urban) community and that it is highly likely that the median voter in the poor community is made better off from the merger. The percentage of those voters voting in favor of city-county consolidation is then predicted to be a positive function of the difference between the mean (median) family income of the residents in the proposed government and the mean (median) family income of the residents in the current government. In this paper we develop and test this proposition in a model which is couched in a theory of voter behavior.

Determinants of regulatory policies toward competition in the electric utility industry

SummaryStatistical results from this study generally support the Stigler-Peltzman theory of regulation. The only finding not consistent with Peltzmans formulation of the theory is that electd officials are more likely to favor procompetitive policies than appointed officials. Peltzman has argued this should be an unimportant factor. For public policy purposes, however, it seems that any movement toward elected regulatory commissions would tend to foster pro-competitive policies, at least in the short run.Data reveal that an increase in realized monopoly power of the utility increases the probability of hostile PSE policies toward competition. An increase in average value added in manufacturing and a decrease in the states per capita income increased the probability of favorable PSC policies toward competition. Also, the more powerful are natural gas interests, the more hostile are commission policies toward competition.These empirical findings refute the hypothesis that regulatory policy is somehow an exogenous variable which results from ad hoc political and administractive factors. Instead, it appears that regulatory policy is a direct result of economic factors.

Money Statistics of New England, 1785–1837

This paper brings together the existing commercial bank balance sheets for New England for the period 1785–1837. Approximately 79 percent of all balance sheets issued have been found, and data from these are presented in aggregated form. Data compiled from available statements were then used to estimate the balance sheets of missing banks and the missing items on individual balance sheets. The variables used in estimating included authorized capital stock, a time trend, age of bank, city population, paid-in capital, deposits, loans and discounts, bank notes in circulation, and reserves. The actual and estimated balance sheets are then combined and presented.

Empirical Tests for the Effect of Regulation on Firm and Interruptible Gas Service

This paper argues that firm and interruptible natural gas prices are comparable to peak and off-peak prices in the electric-utility industry, and the observed patterns of firm-interruptible natural gas contracts are not a random occurrence, but are a function of systematic variation in factors which characterize or delineate the various natural gas distribution systems, and that these factors are economic in nature. One of the most-important economic factors is the presence and effectiveness of government regulation. More specifically, through a proxy test, the hypothesis is analyzed that peak prices are reduced by rate-of-return regulation. Although there probably are net welfare gains from rate-of-return regulation, the decision to add additional storage capacity is quite sensitive to regulation, thus largely offsetting the consumer surplus gained from a lower peak-price under regulation.