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Price discrimination in political advertising: Evidence from the 2012 presidential election

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  • Sarah Moshary

Abstract

In 2010, the US Supreme Court loosened contribution limits to Political Action Committees (PACs), sparking fears that big donors could exert outsize influence on elections by funding PAC advertising. However, PACs are potentially handicapped when buying advertising time; data from 2012 reveal that PACs pay 32% above regulated campaign rates. I estimate a model of demand for advertising by PACs, exploiting the misalignment of state and media market borders to address price endogeneity. I find that prices reflect willingness‐to‐pay for viewer demographics rather than media bias. The estimates further suggest that network‐owned stations discriminate more successfully than do local affiliates.

Suggested Citation

  • Sarah Moshary, 2020. "Price discrimination in political advertising: Evidence from the 2012 presidential election," RAND Journal of Economics, RAND Corporation, vol. 51(3), pages 615-649, September.
    • Handle: RePEc:bla:randje:v:51:y:2020:i:3:p:615-649
    DOI: 10.1111/1756-2171.12335
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    References listed on IDEAS

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    3. Liberini, Federica & Redoano, Michela & Russo, Antonio & Cuevas, Angel & Cuevas, Ruben, 2025. "Politics in the facebook era. Evidence from the 2016 US presidential elections," European Journal of Political Economy, Elsevier, vol. 87(C).
    4. Lingling Zhang & Doug J. Chung, 2020. "The Air War vs. the Ground Game: An Analysis of Multichannel Marketing in U.S. Presidential Elections," Marketing Science, INFORMS, vol. 39(5), pages 872-892, September.
    5. Pinar Yildirim & Andrei Simonov & Maria Petrova & Ricardo Perez-Truglia, 2024. "Are Political and Charitable Giving Substitutes? Evidence from the United States," Management Science, INFORMS, vol. 70(11), pages 8030-8043, November.

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