The Impact of Campaign Spending on Votes in Multiparty Elections

The impact of candidate campaign spending on votes and abstention in multiparty elections is estimated from the specification of a structural model of voter behavior. This model accounts for the endogeneity of campaign spending as well as the heterogeneity in voter preferences. Empirical results are estimated from aggregate (actual) election data using a standard Berry, Levinsohn and Pakes (1995) estimation strategy. The results demonstrate the importance of spending during the campaign period and voter heterogeneity with respect to these expenditures. The ownand cross-expenditure vote share elasticity estimates reveal that political campaign spending not only redistributes voters across parties but also decreases the size of the abstaining group of the electorate. JEL classification: C10; D72; L10 ∗Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, British Columbia, V5A 1S6, email: [email protected], phone: (604) 268-6793, fax: (604) 291-5944. I would like to thank Dwayne Benjamin, Mel Fuss, Kevin Milligan,Aloysius Siow, Mike Veall, and Eric Rasmusen for helpful comments and suggestions.