The Returns to Lobbying: Evidence from Local Governments in the “Age of Earmarks”

I measure the returns to lobbying for US local governments in terms of federal earmarks. Because a local government’s decision to lobby may be endogenous to receiving an earmark, I instrument for lobbying with local housing prices. Since the time period of my analysis covers the Housing Crisis, I argue that the variation in housing prices over this time was largely exogenous to federal earmark distributions. The strong correlation that I find...