Money and Votes. Incumbents in Mayoral Elections in Chile

Renato Aguilar () and Claudio Parés ()
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Renato Aguilar: Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República
Claudio Parés: Departamento de Economía, Universidad de Concepción (Chile)

No 1316, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: Being an incumbent is an important advantage in an election. This issue has been discussed in numerous studies and has been formalized into the so called permanent campaign hypothesis. This means that the incumbents, during all the duration of their tenure, should be running a more or less intensive campaign. The tenure of the office, eventually disputed in the election, allows an elected officer to use some resources and opportunities that are no available for the other candidates. This study empirically explores this hypothesis for the mayoral election of 2012 in Chile, using a database covering all the Chilean municipalities. A central point is the money spent in the campaign by the incumbents in the mayoral election. We empirically study these issues with the help of a regression model for the campaign expenditures and the vote obtained by the incumbents. The estimation of this model is not trivial because we have two equations determining simultaneously the expenditures and the vote. Additionally, we had to consider that both variables are bounded and that we have a latent variable: the expected vote for 2012. We solved these problems using maximum likelihood truncated estimations and instrumental variables. Our results suggest that incumbent candidates plan their campaign expenditures based mostly in their expected vote. We also found empirical evidence suggesting that winners behave differently than losers.

Keywords: Incumbents; Mayoral Elections; Campaign Expenditures; Simultaneous Equations; Truncated Regressions (search for similar items in EconPapers)
JEL-codes: C34 D70 D72 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-12
New Economics Papers: this item is included in nep-cdm and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:ude:wpaper:1316

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