The incumbent puzzle

Abstract

Over the past decades there have been numerous attempts to measure the effects of candidate’s spending on election outcome. Many of the literature came up with the conclusion that the spending by challengers greatly increases the challengers vote share but that spending by incumbents has little or even negative effect. This article estimates the effect that incumbent’s and challenger’s spending has on incumbent’s vote percentage using ordinary least squares and two stage least squares and the effect of these spending on the possibility that incumbents have to win the elections through logit regressions.