CAMPAIGN SPENDING AND INCUMBENCY - AN ALTERNATIVE SIMULTANEOUS-EQUATIONS APPROACH

This paper estimates the effects of incumbent spending and challenger spending in U.S. House elections in the 1970s and 1980s. The paper emp loys FIML simultaneous equations analysis involving instrumental varia bles as vote predictors, and zero-covariance restrictions for the vote -spending disturbances. This procedure allows the estimation of spendi ng effects given plausible assumptions about the effects of unobserved causes of the vote on candidate spending. The results are that incumb ent spending matters even with only modest amounts of simultaneity. Ev idence is presented to suggest that the effectiveness of new incumbent spending declines with seniority but accumulates to the incumbent's l ong-term advantage.