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ABSTRACT

Proponents of metropolitan consolidation identify a range of benefits that may be realized through merger, including improved financial health. There is little agreement as to the actual outcomes across localities that have consolidated, even when limiting the scope to the four major urban mergers, including the merger of Louisville, Kentucky with Jefferson County in 2003, which is under consideration here. One likely reason for conflicting results is the limitation of reflexive analysis as a means of assessing financial impact. In the private sector, analysts would use financial ratio analysis to determine whether the new merged entity was financially healthier after merger. Though a political merger differs from a private sector merger, financial ratio analysis can still be used for pre- and post- analysis of merger effects on financial health. Further, when enough time has passed since merger, quasi-experimental designs like interrupted time series can test the hypothesis that merger had no significant financial impact on the entity at all.