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Congressional campaign expenditures for the U.S. House of Representatives in 1988. For each of the 173 two-party races we know the percentage of votes received by candidate A (voteA), the logarithm of campaign expenditures (in thousands of US dollars) for both candidate A (lexpendA) and candidate B (lexpendB) and, consequently, the share of total expenditure accounted for by candidate A (shareA).
Consider the linear regression:
voteA = 0.35lexpendA -0.77lexpendB + 23.54
a. interpret the estimated coe?cients. Are these statistically signi?cant?
b. Do you believe these estimates should be interpreted as causal e?ects of campaign expenditures on voting outcome? If not, why?
c. Test the hypothesis H0 : β1 = −β2 versus the alternative H1 : β1 ?= −β2, and describe why this might be of interest.
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