Population, land, economic conditions, and the allocation of new deal spending

This paper identifies two problems in Wallis's (1998) analysis of New Deal spending, addresses those problems, and contributes new findings. One problem is the interpretation of 1/population as an apolitical variable. The other is that, although Wallis discusses land area as a criterion in spending formulas, his econometric analysis omits land area. Controlling for land area eliminates Wallis's estimated effects of 1/population. After discussing those problems, this paper presents an empirical relationship sought but not uncovered by previous authors: A few land and income variables can predict the vast majority of the cross-state variation in per capita spending. (C) 2001 Academic Press.