It's the Media, Stupid - How Media Activity Shapes Public Spending
AbstractPoliticians seeking reelection need voters to know what they have done for them. Thus, incentives may arise to spend more money where media coverage is higher. We present a simple model to explain the allocation of public spending across jurisdictions contingent on media activity. An incumbent seeking to maximize the probability of reelection will shift more money to jurisdictions where an extra dollar gains more votes because a larger share of the electorate is informed about his policy. This prediction is tested using US data on county-level public spending, Designated Market Areas (DMAs) and location of licensed television stations. Instrumenting for the possible endogeneity of media activity to public spending, 2SLS results confirm a positive effect of media coverage on county-level public spending. Spatial regression rules out the possibility of confounding media effects with spatial autocorrelation.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2493.
Date of creation: 2008
Date of revision:
public spending; information; television; elections;
Other versions of this item:
- Bruns, Christian & Himmler, Oliver, 2007. "It's the Media, Stupid - How Media Activity Shapes Public Spending," MPRA Paper 10332, University Library of Munich, Germany, revised Aug 2008.
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
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