7 The Census defines this category, which is primarily Medicaid spending, as "payments to medical vendors."
8 Census does not consider spending on state run hospitals social welfare spending because the patients at such hospitals might not be predominantly low-income. However, some part of the federal grants, which we measured by Census intergovernmental revenues, goes to support public hospitals primarily through the Medicare and Medicaid Disproportionate Share Hospital (DSH) program. Therefore, examining how spending on public hospitals varied across states was important. Unfortunately, Census considers grants for public hospitals to be grants for non-social welfare and fails to disaggregate grant amounts by detailed function. So, we were unable to identify federal grants for public hospitals and thus were unable to separate public hospital spending into a federal share component and a state and local share component as we could do for overall Census social welfare spending. Nonetheless, we used spending per capita on public hospitals as a dependent variable in most of our regression analyses where we did not have to identify separately the federal and state and local funding components.
9 Definitions for these five categories in the Census data used in our analysis appear in Exhibit II-1.
10 The coefficients on the explanatory variables were not allowed to vary across states in our general model, but we did estimate the regression separately for each quartile defined in terms of average per capita personal income. These quartile regressions estimated the coefficients separately for each quartile. However, the estimated state effects used in our cross-state analysis (see subsection III .B.4.) came from the regression estimated over all states. These state effects captured differences in state spending unexplained by the variables in the fixed coefficient model. Some part of these effects could be due to the fact that states had different responses (i.e., variable coefficients) to the explanatory variables.
11 Public welfare expenditure includes all of the categories shown in Exhibit II-1, except Public Hospitals. The Census views spending on state-run public hospitals as outside its social welfare category. However, we included spending on public hospitals as a variable of interest, partly because state-run public hospitals receive Medicaid funding and also because low-income individuals might receive services in the public hospitals.
12 The Federal Categorical Assistance category (E67) tracks federally funded programs and includes AFDC cash assistance, TANF cash assistance, or both, to the extent it passes through state accounts; federal Supplemental Security Income (SSI); plus state supplements. The only federal SSI included in E67 is retroactive federal payments to reimburse the state for payments made to individuals under state supplement programs. The Other Cash Assistance Programs category (E68) includes cash assistance programs not under federal categorical programs.
13 As noted, Vendor Payments for Medical Care is the largest category by far and consists mostly of Medicaid.
14 The Other Public Welfare category (E79) includes operational payments for administrative workers and payments for programs such as child care, foster care, low-income energy assistance, social services to the physically disabled, and programs funded by the Social Services Block Grant.
15 The "state effect" for each state was computed by adding the intercept to the coefficient of the dummy variable for the state.
"report.pdf" (pdf, 1.52Mb)