Advertising Competition in Presidential Elections

Advertising Competition in Presidential Elections

By Brett Gordon, Wesley R. Hartmann
August 2013Working Paper No. 2131

Presidential candidates purchase advertising based on each state’s potential to tip the election. The structure of the Electoral College concentrates spending in battleground states, such that a majority of voters are ignored. We estimate an equilibrium model of multimarket advertising competition between candidates that allows for endogenously determined budgets. In a Direct Vote counterfactual, we find advertising would be spread more evenly across states, but total spending levels can either decrease or increase depending on the contestability of the popular vote. Spending would increase by 13 percent in the extremely narrow 2000 election, but would decrease by 54 percent in 2004. These results suggest that the Electoral College greatly increases advertising spending in typical elections.

Keywords
Political Advertising