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The effects of changes in per capita real GDP, real taxes and real government transfer payments on midterm congressional election outcomes during the 1946–2002 period are examined. Voters are found to take all of these, except taxes and transfers at the state and local government levels, into account in casting their ballots. However, the weights they place on each are found not to be the same. Consequently, the common practice of summarizing the economic conditions faced by voters through disposable income seems to be inappropriate. Also, omission of tax and transfer variables from the vote equation, and using vote swing rather than vote share as the dependent variable is found to result in underestimation of the coefficient of per capita GDP growth. Copyright IAES 2006congressional elections, economic voting, taxes, government transfers, D70,

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Abstrac~This study elWJlines the deterrninanls of retail IJIIde capture in llCliUiletropolitan counties in Illinois using pooled time series lind aou-aection data from 1984 to 1989. By controlling for fiXed effects, the appro1Ch avoids misspecif~ while revealing trlde patterns through time. The findings indicate that demand plays a central role in rural trade. However, the results suggest that structural elemenls (such as market ICCell and shopping center developnent) ue importlnt and changing over time to the detriment of rural G'eas.

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This article examines the role of services in regional employment change in Illinois from 1972-87. The approach applies recent advances in time-series analysis to investigate both the long-term and short-term relationship among employment in three sectors: goods production, export-potential services, and local services. The results indicate that there is not a long-term relation among these variables, i.e., that they do not move together in the long run. In the short term, the evidence is that employment in the service sectors follows employment change in goods production, although the response persists for only six months. The results suggest that a policy of targeting export-potential services is not likely to produce sustained employment growth in the other sectors.

Taxes are believed to have adverse effects on economic activity, work effort, consumption , savings, and capital formation. Although higher marginal tax rates are expected to yield an increase in government revenues in the short run, their long-run effects are not as certain. In the long run, the taxpayers alter their behavior to avoid paying more taxes. Using the unit root methodology, the authors examine whether tax rate changes during the past half century had a permanent or temporary impact on various revenues collected by the federal and state and local governments as a percentage of gross domestic product (GDP) ( revenue/GDP ratios). Our results show that past shocks to tax rates did not alter the long-run levels of most federal revenue/GDP ratios. In the case of state and local governments, although permanent changes in the levels of the ratios are indicated, the authors explain that this occurs only under some special circumstances.