Let us modify Computer Exercise C8.4 by using voting outcomes in 1990 for incumbents who w...

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:

= 75.71 + .312 prtystrA + 4.93 democA

(9.25) (.046) (1.01)

-.929 log(expendA) - 1.950 log(expendB)

(.684) (.281)

n = 186, R2 = .495, R2 = .483,

and

= 70.81 + .282 prtystrA + 4.52 democA

(10.01) (.052) (1.06)

-.839 log(expendA) - 1.846 log(expendB) + .067 voteA88

(.687) (.292) (.053)

n = 186, R2 = .499, 2 = .485.

(i) Interpret the coefficient on voteA88 and discuss its statistical significance.

(ii) Does adding voteA88 have much effect on the other coefficients?