42 J.L. & Econ. 699 (1999)
The Electoral Effects of Incumbent Wealth

handle is hein.journals/jlecono42 and id is 707 raw text is: THE ELECTORAL EFFECTS OF
INCUMBENT WEALTH*
JEFFREY MILYO       and     TIMOTHY GROSECLOSE
Tufts University              Stanford University
ABSTRACT
The absence of limits on own-source campaign contributions is widely thought
to give wealthy candidates an advantage in congressional elections. We employ a
unique data set on the wealth of House incumbents running for reelection in 1992.
We find that wealthy incumbents do not raise or spend more campaign funds and
do not win greater vote shares in their reelection bids. Further, incumbent wealth
does not deter high-quality challengers.
Is there no one on this planet to even challenge me? (GENERAL
ZOD in Superman H)
I can think of 675 million reasons not to. (MITT ROMNEY, on
whether he would run for the Senate in 1996 against incumbent
John Kerry, D-Mass., referring to the size of the family fortune
of Kerry's fiancee, Theresa Heinz)
I. INTRODUCTION
IT is conventional wisdom that wealthy candidates have an unfair ad-
vantage in elections and that wealthy incumbents are less likely to experi-
ence serious challenges for their seats. Because federal regulations limit
outside campaign contributions, but not own-source contributions, wealthy
candidates are presumed to have a tremendous advantage in raising cam-
paign funds. Consequently, to the extent campaign spending drives electoral
success, wealthy candidates have a leg up in political contests. This in turn
may cause potential candidates to shy away from challenging well-heeled
incumbents. Such reasoning has been a major impetus for recent campaign
finance reform proposals.' Further, there have been several recent court
* Samantha Schosberg provided able research assistance. We also thank Steve Ansolabe-
here, David Figlio, Eric Hellund, and Jeff Lewis for helpful suggestions on an earlier draft;
all errors remain our own.
The ill-fated campaign finance reform bill proposed by Senators McCain (R-Ariz.) and
Feingold (D-Wis.) in the first session of the 105th Congress contained provisions to discour-
age the use of candidates' personal funds. More generally, any proposal to cap overall expen-
ditures by candidates would constrain own-source funding.
[Journal of Law and Economics, vol. XLII (October 1999)]
© 1999 by The University of Chicago. All rights reserved. 0022-2186/1999/4202-0005$01.50
699

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