Using Repeat Challengers to Estimate the
Effect of Campaign Spending on Election
Outcomes in the U.S. House
Steven D. Levitt

Does campaign money influence results?
- During election times, political office candidates use large amounts of money
to improve their chances of election
- Candidates assume that campaign spending increases their chances of
winning an election
- Levitt seeks to understand the role of money in politics, the determinants of
electoral competition, and the design of campaign finance reform

Specification flaws in the Literature
- Most studies have used cross-sectional data
- Levitt argues cross-sectional data did not allow for an ability to control for
candidate quality and district-specific factors in elections
- Past studies typically find:
- Large positive effect for challenger spending
- Small effect for incumbent spending
- Use of panel data allow for the control of omitted variable bias present in
cross-sectional studies

Data and Panel Data Strategy
- Data: All US House elections from 1972 to 1990 restricted to repeated
electoral competitions (i.e., a subset of elections that includes only those
where candidates face each other more than once)
- This allows for a specification (∆) that controls for candidate quality and
district-specific effects (limitations of cross-sectional studies)

Models and Variables
1. Cross-sectional
2. Difference
Unobserved

Cross-sectional results

Panel data results

Representativeness