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How money drives US congressional elections: Linear models of money and outcomes

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  • Ferguson, Thomas
  • Jorgensen, Paul
  • Chen, Jie

Abstract

This paper analyzes whether money influences election outcomes. Using a new and more comprehensive dataset built from government sources, the paper shows that the relations between money and votes cast for major parties in elections for the U.S. Senate and House of Representatives from 1980 to 2018 are well approximated by straight lines. It then considers possible challenges to this “linear model” of money and elections on statistical grounds, resting on possible endogeneity arising from reciprocal causation between, for example, popularity and votes. The paper develops a spatial Bayesian latent instrumental variable model to tackle this much discussed problem. It checks its results by studying relations between changes in gambling odds and contributions in key elections. Both approaches suggest that reciprocal causation may happen to some degree, but that money’s independent influence on elections remains powerful.

Suggested Citation

  • Ferguson, Thomas & Jorgensen, Paul & Chen, Jie, 2022. "How money drives US congressional elections: Linear models of money and outcomes," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 527-545.
    • Handle: RePEc:eee:streco:v:61:y:2022:i:c:p:527-545
    DOI: 10.1016/j.strueco.2019.09.005
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    References listed on IDEAS

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