How Prices Matter in Politics: Returns to Campaign Advertising

42 Pages Posted: 28 Jun 2007

See all articles by Thomas Stratmann

Thomas Stratmann

George Mason University - Buchanan Center Political Economy; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 2007

Abstract

The apparent ineffectiveness of incumbent campaign spending in congressional elections is one of the enduring puzzles in the political economy literature. Intuitively, higher spending should translate into more advertising, and more advertising should translate into more votes. Previous work in this area has assumed that advertising prices are uniform across congressional districts, and therefore that campaign spending alone is a good proxy for campaign advertising. However, candidates in different districts face widely different advertising prices. This paper emphasizes the importance of media advertising prices for the analysis of campaign spending and shows that differences in advertising costs are one source of the apparent ineffectiveness of campaign spending. Accounting for the price of advertising, this paper shows that campaign spending is productive for both incumbents and challengers.

Keywords: campaign finance, elections, campaign advertising, television advertising

JEL Classification: D72

Suggested Citation

Stratmann, Thomas, How Prices Matter in Politics: Returns to Campaign Advertising (April 2007). Available at SSRN: https://ssrn.com/abstract=997009 or http://dx.doi.org/10.2139/ssrn.997009

Thomas Stratmann (Contact Author)

George Mason University - Buchanan Center Political Economy ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-2330 (Phone)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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