Munich Personal RePEc Archive

Proposition 4, Reply

Cebula, Richard and Chevlin, Linda (1982): Proposition 4, Reply. Published in: The American Journal of Economics and Sociology , Vol. 42, No. 1 (31 January 1983): pp. 122-124.

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In this Reply, we concede that our assumption that per capita expenditures will grow by the maximum permitted under Proposition 4 is arbitrary. How "unrealistic" this assumption is (would be) cannot be known. Nevertheless, we viewed the assumption under debate as necessary to the undertaking of our exploratory analysis of the effects of Proposition 4 because it provided the analysis with a parameter, and a reasonably plausible one at that. The second issue raised concerns our use of the services price index (SPI) to measure inflation. It is argued by ours critics that the consumer price index (CPI) would have been a better choice. We argue the issue is trivial since the percent change in the SPI is nearly identical to that of the CPI over the study period.

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