A SYSTEMS-APPROACH TO CAMPAIGN FINANCE IN UNITED-STATES HOUSE ELECTIONS

Previous research on campaign financing has been hampered by the persistence of the simultaneity problem. In this article the authors attempt to overcome this problem by specifying a comprehensive simultaneous model of congressional elections. Specifically, equations determining challenger political quality, candidate expenditures, and electoral outcomes are theoretically derived and then estimated as a single equation system. Overall, this comprehensive simultaneous model fits the data relatively well. More importantly, the authors find that incumbent expenditures exert a significant impact on electoral outcomes. The marginal impact of incumbent spending is not, however, the same for all incumbents. Specifically, first-term incumbents receive a much larger marginal return on their expenditures than do multiterm incumbents. In fact, the marginal return on spending by first-term incumbents rivals the marginal return on spending by challengers.