Question: Let us modify Computer Exercise C8.4 by using voting outcomes in 1990 for incumbents who were elected in 1988. Candidate A was elected in 1988

Let us modify Computer Exercise C8.4 by using voting outcomes in 1990 for incumbents who were elected in 1988. Candidate A was elected in 1988 and was seeking reelection in 1990; voteA90 is Candidate A's share of the two-party vote in 1990. The 1988 voting share of Candidate A is used as a proxy variable for quality of the candidate. All other variables are for the 1990 election. The following equations were estimated, using the data in VOTE2.RAW:

(9.25) (.046) (1.01)
- .929 log(expendA) - 1.950 log(expendB)
(.684) (.281)
n = 186, R2 = .495, RÌ…2 = .483,
and

(10.01) (.052) (1.06)
- .839 log(expendA) - 1.846 log(expendB) + .067 voteA88
(.687) (.292) (.053)
n = 186, R2 = .499, RÌ…2 = .483,
(i) Interpret the coefficient on voteA88 and discuss its statistical significance.
(ii) Does adding voteA88 have much effect on the other coefficients?

voteA90 voteA90

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