It's the Media, Stupid - How Media Activity Shapes Public Spending

38 Pages Posted: 12 Dec 2008

See all articles by Christian Bruns

Christian Bruns

University of Goettingen (Göttingen) - Department of Economics

Oliver Himmler

University of Goettingen (Göttingen) - Department of Economics; Max Planck Institute for Research on Collective Goods

Multiple version iconThere are 2 versions of this paper

Date Written: December 2008

Abstract

Politicians seeking reelection need voters to know what they have done for them. Thus, incentives may arise to spend more money where media coverage is higher. We present a simple model to explain the allocation of public spending across jurisdictions contingent on media activity. An incumbent seeking to maximize the probability of reelection will shift more money to jurisdictions where an extra dollar gains more votes because a larger share of the electorate is informed about his policy. This prediction is tested using US data on county-level public spending, Designated Market Areas (DMAs) and location of licensed television stations. Instrumenting for the possible endogeneity of media activity to public spending, 2SLS results confirm a positive effect of media coverage on county-level public spending. Spatial regression rules out the possibility of confounding media effects with spatial autocorrelation.

Keywords: public spending, information, television, elections

JEL Classification: D7, D8, H7

Suggested Citation

Bruns, Christian and Himmler, Oliver, It's the Media, Stupid - How Media Activity Shapes Public Spending (December 2008). CESifo Working Paper Series No. 2493, Available at SSRN: https://ssrn.com/abstract=1314713 or http://dx.doi.org/10.2139/ssrn.1314713

Christian Bruns (Contact Author)

University of Goettingen (Göttingen) - Department of Economics ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany

Oliver Himmler

University of Goettingen (Göttingen) - Department of Economics ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany

HOME PAGE: http://https://www.uni-goettingen.de/en/dr-oliver-himmler/480040.html

Max Planck Institute for Research on Collective Goods ( email )

Kurt Schumacher Str 10
Bonn, 53113
Germany

HOME PAGE: http://https://www.coll.mpg.de/team/page/oliver_himmler

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