Legislative compensation: An econometric analysis

Abstract

In this econometric project I look at legislative compensation across the fifty states to see if market theories hold; market theory would suggest that higher legislative pay would yield better performance. My hypothesis is that market theories will hold, the states with higher compensation rates will see better results. I use ordinary least squares regression: some of my dependent variables include GDP per capita, unemployment, graduation rates, and more. The results, as a whole are inconclusive, because it cannot be determined if increased legislative compensation results in increased legislative performance. While the results are inconclusive there are some valuable results of the analysis. A large portion of the variables display a positive relationship: some of these positive correlations are more desirable than others.