2 Let us modify Computer Exercise C4 in Chapter 8 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: voteA90 5 75.71 1 .312 prtystrA 1 4.93 democA (9.25) (.046) (1.01) 2.929 log(expendA) 2 1.950 log(expendB) (.684) (.281) n 5 186, R2 5 .495, - R2 5 .483, and voteA90 5 70.81 1 .282 prtystrA 1 4.52 democA (10.01) (.052) (1.06) 2.839 log(expendA) 2 1.846 log(expendB) 1 .067 voteA88 (.687) (.292) (.053) n 5 186, R2 5 .499, - R2 5 .485.

(i) Interpret the coefficient on voteA88 and discuss its statistical significance. (ii) Does adding voteA88 have much effect on the other coefficients?