“Political Conformity: Event-Study Evidence from the United States” by Dr. Ricardo Perez-Truglia
STRATEGY SEMINAR
Speaker:
Dr. Ricardo Perez-Truglia
Assistant Professor
UCLA Anderson School of Management
Abstract:
We propose that individuals are more politically active in more like-minded social environments. To test this hypothesis, we combine administrative data from the Federal Election Commission and the United States Postal Service. We identify
45,000 individuals who contributed to Barack Obama’s 2008 presidential campaign and who changed residences either before or after the 2012 election cycle. We examine whether living in an area with a higher share of Democrats causes higher contributions to Obama. We disentangle the direction of causality by exploiting the timing of residential mobility with an event-study analysis. We find that conformity effects are economically significant: increasing the share of Democrats by 1% increases the contribution to Obama by 0.11% (p-value<0.01). Last, we provide a model that uses the reduced-form estimates for counterfactual analysis. We find that 27% of the degree of geographic polarization in contributions can be attributed to conformity effects.
