Local Economic Gains from Primary Election Spending
Rebecca Lessem, Carly Urban
This article asks how government and private consumption spending affect earnings in service sectors. To do this, we exploit the variation across states and time in the money spent while campaigning for a party's Presidential primary nomination. We create a novel data set combining the date each state held its primary from 1976 to 2008, the date in each election cycle in which only one candidate remained, and quarterly state earnings by sector. Using an instrumental variable strategy, we find that hosting a primary election increases earnings, particularly in the retail and accommodation sectors. These results remain consistent when using data on primary campaign expenditures across states in the 2004 and 2008 elections.
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