IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v114y2022ics0264999322001651.html
   My bibliography  Save this article

The effect of endogenous campaign spending and voter heterogeneity on candidates' vote share: Empirical evidence from Taiwanese local elections

Author

Listed:
  • Tang, Meng-Chi
  • Huang, Ya-Wei

Abstract

The effect of candidates' campaign spending is conditional on voter characteristics, but this relationship has rarely been examined due to voter anonymity in election data. This paper addresses this concern by using a random-coefficients logit demand model to allow for voter heterogeneity in the estimation, while campaign spending is considered to be endogenous. Using election data from Taiwan, empirical results show that the effect of campaign spending on vote share is positive and significant for the areas with more voters over 65 years old, more high-income earners and fewer college graduates. The results reveal the electoral culture in Taiwan that relies heavily on local power brokers, whose channeling of campaign spending more likely affects older and wealthier but less-educated voters. Empirical results also show that the marginal effect of campaign spending is larger for the challengers than the incumbents, while the vote share is more spending-elastic for the incumbents than the challengers.

Suggested Citation

  • Tang, Meng-Chi & Huang, Ya-Wei, 2022. "The effect of endogenous campaign spending and voter heterogeneity on candidates' vote share: Empirical evidence from Taiwanese local elections," Economic Modelling, Elsevier, vol. 114(C).
    • Handle: RePEc:eee:ecmode:v:114:y:2022:i:c:s0264999322001651
    DOI: 10.1016/j.econmod.2022.105919
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999322001651
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2022.105919?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marie Rekkas, 2007. "The Impact of Campaign Spending on Votes in Multiparty Elections," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 573-585, August.
    2. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    3. Rickman, Dan S. & Wang, Hongbo, 2018. "Two tales of two U.S. states: Regional fiscal austerity and economic performance," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 46-55.
    4. Priyanka, Sadia, 2020. "Do female politicians matter for female labor market outcomes? Evidence from state legislative elections in India," Labour Economics, Elsevier, vol. 64(C).
    5. Levitt, Steven D, 1994. "Using Repeat Challengers to Estimate the Effect of Campaign Spending on Election Outcomes in the U.S. House," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 777-798, August.
    6. Chapman, Randall G & Palda, Kristian S, 1983. "Electoral Turnout in Rational Voting and Consumption Perspectives," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(4), pages 337-346, March.
    7. Erikson, Robert S. & Palfrey, Thomas R., 2000. "Equilibria in Campaign Spending Games: Theory and Data," American Political Science Review, Cambridge University Press, vol. 94(3), pages 595-609, September.
    8. David W. Vincent, 2015. "The Berry–Levinsohn–Pakes estimator of the random-coefficients logit demand model," Stata Journal, StataCorp LP, vol. 15(3), pages 854-880, September.
    9. Jha, Chandan Kumar & Sarangi, Sudipta, 2018. "Women and corruption: What positions must they hold to make a difference?," Journal of Economic Behavior & Organization, Elsevier, vol. 151(C), pages 219-233.
    10. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
    11. Mallick, Sushanta & Marques, Helena, 2017. "Export prices, selection into exporting and market size: Evidence from China and India," International Business Review, Elsevier, vol. 26(6), pages 1034-1050.
    12. Timothy J. Feddersen, 2004. "Rational Choice Theory and the Paradox of Not Voting," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 99-112, Winter.
    13. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    14. Joshi, Swarup, 2022. "How effective are Governor's party affiliated campaign promises on crime? Evidence from U.S. states," Economic Modelling, Elsevier, vol. 113(C).
    15. Larreguy, Horacio & Marshall, John & Querubã N, Pablo, 2016. "Parties, Brokers, and Voter Mobilization: How Turnout Buying Depends Upon the Party’s Capacity to Monitor Brokers," American Political Science Review, Cambridge University Press, vol. 110(1), pages 160-179, February.
    16. Jacobson, Gary C., 1978. "The Effects of Campaign Spending in Congressional Elections," American Political Science Review, Cambridge University Press, vol. 72(2), pages 469-491, June.
    17. Gerber, Alan, 1998. "Estimating the Effect of Campaign Spending on Senate Election Outcomes Using Instrumental Variables," American Political Science Review, Cambridge University Press, vol. 92(2), pages 401-411, June.
    18. Louis-Philippe Beland Jr., 2015. "Political Parties and Labor-Market Outcomes: Evidence from US States," American Economic Journal: Applied Economics, American Economic Association, vol. 7(4), pages 198-220, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brett R. Gordon & Wesley R. Hartmann, 2013. "Advertising Effects in Presidential Elections," Marketing Science, INFORMS, vol. 32(1), pages 19-35, June.
    2. Bekkouche, Yasmine & Cagé, Julia & Dewitte, Edgard, 2022. "The heterogeneous price of a vote: Evidence from multiparty systems, 1993–2017," Journal of Public Economics, Elsevier, vol. 206(C).
    3. Abel François & Michael Visser & Lionel Wilner, 2016. "Using Political Financing Reforms to Measure Campaign Spending Effects on Electoral Outcomes," CESifo Working Paper Series 6232, CESifo.
    4. Bekkouche, Yasmine & Cagé, Julia & Dewitte, Edgard, 2022. "The heterogeneous price of a vote: Evidence from multiparty systems, 1993–2017," Journal of Public Economics, Elsevier, vol. 206(C).
    5. Yasmine Bekkouche & Julia Cage, 2019. "The Heterogeneous Price of a Vote: Evidence from France, 1993-2014," SciencePo Working papers Main hal-03393084, HAL.
    6. Cagé, Julia & Bekkouche, Yasmine, 2018. "The Heterogeneous Price of a Vote: Evidence from France, 1993-2014," CEPR Discussion Papers 12614, C.E.P.R. Discussion Papers.
    7. Yasmine Bekkouche & Julia Cage & Edgard Dewitte, 2022. "The Heterogeneous Price of a Vote: Evidence from Multiparty Systems, 1993-2017," SciencePo Working papers Main hal-03389172, HAL.
    8. Kevin Milligan & Marie Rekkas, 2008. "Campaign spending limits, incumbent spending, and election outcomes," Canadian Journal of Economics, Canadian Economics Association, vol. 41(4), pages 1351-1374, November.
    9. Abel François & Michael Visser & Lionel Wilner, 2022. "The petit effect of campaign spending on votes: using political financing reforms to measure spending impacts in multiparty elections," Public Choice, Springer, vol. 192(1), pages 29-57, July.
    10. Bruno Carvalho, 2021. "Campaign Spending in Local Elections: the Effects of Public Funding," Working Papers ECARES 2021-30, ULB -- Universite Libre de Bruxelles.
    11. repec:hal:spmain:info:hdl:2441/10lirmbd5p8h4ae52oi51b4cka is not listed on IDEAS
    12. repec:hal:spmain:info:hdl:2441/2ahul47tb09rvqfl9eelv7o5ca is not listed on IDEAS
    13. repec:hal:wpspec:info:hdl:2441/2ahul47tb09rvqfl9eelv7o5ca is not listed on IDEAS
    14. repec:hal:wpspec:info:hdl:2441/10lirmbd5p8h4ae52oi51b4cka is not listed on IDEAS
    15. Julia Cage & Edgard Dewitte, 2021. "It Takes Money to Make MPs: Evidence from 150 Years of British Campaign Spending," Sciences Po publications 2021-08, Sciences Po.
    16. Kenneth Benoit & Michael Marsh, 2008. "The Campaign Value of Incumbency: A New Solution to the Puzzle of Less Effective Incumbent Spending," American Journal of Political Science, John Wiley & Sons, vol. 52(4), pages 874-890, October.
    17. Hoyong Jung, 2022. "Examining the relationship between political spending and legislative activities," Bulletin of Economic Research, Wiley Blackwell, vol. 74(2), pages 539-568, April.
    18. repec:hal:wpspec:info:hdl:2441/1dp7827s4n8ht8fk3qhmeuvd0o is not listed on IDEAS
    19. Julia Cage & Edgard Dewitte, 2021. "It Takes Money to Make MPs: Evidence from 150 Years of British Campaign Spending," SciencePo Working papers Main hal-03384143, HAL.
    20. repec:hal:spmain:info:hdl:2441/1dp7827s4n8ht8fk3qhmeuvd0o is not listed on IDEAS
    21. Brett Gordon & Mitchell Lovett & Ron Shachar & Kevin Arceneaux & Sridhar Moorthy & Michael Peress & Akshay Rao & Subrata Sen & David Soberman & Oleg Urminsky, 2012. "Marketing and politics: Models, behavior, and policy implications," Marketing Letters, Springer, vol. 23(2), pages 391-403, June.
    22. Mattia Girotti & Richard Meade, 2017. "U.S. Savings Banks' Demutualization and Depositor Welfare," Working Papers 2017-08, Auckland University of Technology, Department of Economics.
    23. Nathan Canen & Kristopher Ramsay, 2023. "Quantifying Theory in Politics: Identification, Interpretation and the Role of Structural Methods," Papers 2302.01897, arXiv.org.
    24. Thomas Stratmann, 2006. "Contribution limits and the effectiveness of campaign spending," Public Choice, Springer, vol. 129(3), pages 461-474, December.
    25. Eric Avis & Claudio Ferraz & Frederico Finan & Carlos Varjão, "undated". "Money and Politics: The Effects of Campaign Spending Limits on Political Competition and Incumbency Advantage," Textos para discussão 656, Department of Economics PUC-Rio (Brazil).
    26. Bernardo S. Da Silveira & João M. P. De Mello, 2011. "Campaign Advertising and Election Outcomes: Quasi-natural Experiment Evidence from Gubernatorial Elections in Brazil," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(2), pages 590-612.

    More about this item

    Keywords

    Campaign spending; Voting; Voter heterogeneity; BLP;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:114:y:2022:i:c:s0264999322001651. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.