Deep Pockets, Extreme Preferences: Explaining Persistent Differences in Electoral Contributions Across Industries

49 Pages Posted: 17 Feb 2014

See all articles by Thomas Bassetti

Thomas Bassetti

University of Padua - Department of Economics

Filippo Pavesi

Università Carlo Cattaneo (LIUC) - Institute of Economics; Stevens Institute of Technology - School of Business

Date Written: February 15, 2014

Abstract

When considering contributions to electoral campaigns in the U.S., a puzzling regularity is that some industries tend to spend significantly more than others. To explain this evidence, we present a simple theoretical model in which interest groups finance politicians that require funding for campaign advertising in exchange for policy favors. Our model predicts that interest groups with more extreme preferences will devote a greater amount of resources to campaign financing. The empirical evidence, based on data from the U.S. House elections between 2000 and 2004, strongly supports this finding.

Keywords: Campaign Finance, Interest Groups, Elections, Extreme Preferences

JEL Classification: D72, P16

Suggested Citation

Bassetti, Thomas and Pavesi, Filippo, Deep Pockets, Extreme Preferences: Explaining Persistent Differences in Electoral Contributions Across Industries (February 15, 2014). Working Paper Series, Department of Economics, University of Verona 4/2014. Available at SSRN: https://ssrn.com/abstract=2396591 or http://dx.doi.org/10.2139/ssrn.2396591

Thomas Bassetti

University of Padua - Department of Economics ( email )

via Del Santo 33
Padova, 35123
Italy

Filippo Pavesi (Contact Author)

Università Carlo Cattaneo (LIUC) - Institute of Economics ( email )

21053 Castellanza (VA)
Italy

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

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