Political advertising and consumer sentiment: Evidence from U.S. presidential elections

Abstract

We merge panel survey data on consumer sentiment with data on U.S. political advertisements run from 2013 to 2020 and estimate dynamic panel data models predicting the effect of positive, negative, and contrasting ads on several measures of consumer sentiment. We find that political ads during Presidential election cycles have a significant impact. In particular, a higher intensity of positive political ads with an economic theme makes consumers more optimistic about their own current and future financial positions and the future state of the economy. Our findings also suggest that political ads impact sentiment through an emotional appeal rather than by providing information to viewers about economic fundamentals.