Weekly Seminar
Date
08.05.2023
Schedule
12.00
Location
Aula ICS Siemens - Gamesa
Speaker
Mirko Draca (Warwick)
The Returns to Viral Media: The Case of US Campaign Contributions

Social media has changed the structure of mass communication. In this paper we explore its role in influencing political donations. Using a daily dataset of campaign contributions and Twitter activity for US Members of Congress 2019-2020, we find that attention on Twitter (as measured by likes) is positively correlated with the amount of daily donations received, with a within-person elasticity of 0.01. However, this effect is driven by the `viral' top 10\% of the likes distribution, indicating that the returns to attention on Twitter are very concentrated and in line with a 'winner takes all' market. A comparison with cable news coverage shows that Twitter has a distinct channel of influence on donations that is not conflated with the general news cycle. Our results are confirmed in a 'dyadic family' panel of Member's donations across states, where we are able to instrument for the geographic pattern of Twitter usage using the adoption shock that arose from the 2007 South-by-SouthWest (SXSW) festival.

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