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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.

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  • 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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    3. Cox, Christian, 2022. "Dark Money in Congressional House Elections," Economics Letters, Elsevier, vol. 216(C).
    4. Sylvia Hristakeva & Julie Holland Mortimer, 2023. "Price Dispersion and Legacy Discounts in the National Television Advertising Market," Marketing Science, INFORMS, vol. 42(6), pages 1162-1183, November.

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