Academic Earmarks and the Returns to Lobbying

Abstract

In this paper, we estimate the returns to lobbying by universities. To motivate our empirical work, we develop a simple theoretical model of university lobbying for academic earmarks. Our statistical analysis shows that universities represented by a House Appropriations Committee (HAC) or Senate Appropriations Committee (SAC) member spend less money on lobbying than those that are not represented. In addition, using instrumental variables estimations, we show that universities without HAC or SAC representation may receive some benefit to lobbying for earmarks, although in many estimations this benefit is not statistically different from zero. However, for universities with HAC or SAC representation, a 10 percent increase in lobbying yields an additional 2.8 percent or 3.5 percent increase in earmarks, respectively. This suggests that there are large returns to lobbying for academic earmarks if a university is represented by a member of one the HAC or SAC, but little or no return if not.