NCJ Number
70723
Journal
OPERATIONAL RESEARCH QUARTERLY Volume: 28 Issue: 2, i Dated: (1977) Pages: 293-304
Date Published
1977
Length
12 pages
Annotation
A Markov chain model was used to analyze changes in real annual State and local police expenditures in the North Central United States, to show how Federal expenditure and taxation policies might infuence State and local expenditures.
Abstract
The Markov chain was used to describe such changes for 1959-69 in terms of uncontrollable economic and demographic variables, Federal aid to State and local governments, and the rate of inflation in the State and local government sector. Also estimated was a highly simplified model describing the impact of changes in Federal aid to State and local governments on observed changes in the rate of inflation in the State and local government sector. These estimated relationships were then used to analyze a hypothetical problem of allocating a fixed amount of Federal aid among the 12 North Central States. In choosing among the various possible allocations, the objective was to maximize the sum of the weighted probabilities that real per capita police expenditures would increase in the North Central States, while not allowing the rate of inflation in the State and local government sector to rise above its current rate. Of the variables considered, the inflation rate for State and local government expenditures and Federal aid to State and local governments were assumed controllable by public policies. This policy expenditure example was intended to be purely illustrative since in practice policy makers would have to take into account the impact of Federal aid on other aspects of State and local expenditure decisions. Tables, extensive equations, and 29 references are provided. (Author abstract modified)