Case, Anne C. <br/><br/>
Copycatting:  Fiscal Policies of States and Their Neighbors / 
Anne C. Case, James R. Hines, Jr., Harvey S. Rosen. 
 - Cambridge, Mass.  National Bureau of Economic Research  1989. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w3032 .
 - Working Paper Series (National Bureau of Economic Research)  no. w3032. .
<br/><br/> July 1989. 
<br/><br/> This paper formalizes and tests the notion that state governments' expenditures depend on the spending of similarly situated states. We find that even after allowing for fixed state effects, year effects, and common random effects between neighbors, as state government's level of per capita expenditure is positively and significantly affected by the expenditure levels of its neighbors.  Ceteris paribus, a one dollar increase in a state's neighbors' expenditures increases its own expenditure by over 70 cents. 
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