Cash for Votes: Evidence from India

Abstract

We examine consumption patterns around the time of democratic elections to investigate the possibility of vote-buying. Specifically, we combine data from state assembly elections in India with household-level consumer expenditure and employment surveys (conducted by NSSO) over the period 2004-12. Exploiting a difference-in-difference methodology, we estimate the effect elections have on the reported expenditure on various items: food, education-related, healthcare, etc. We observe heterogeneity in such consumption adjustments across households. Moreover, elections result in a greater number of days worked. This, however, cannot account for the consumption increases as the total wage payments for the same period actually register a decline. Our findings indicate that the mere increase in reported economic activity is insufficient explanation for such “spikes” in consumption and is suggestive of vote-buying.

Keywords: D12, D72, H40