Photo by Salvador Ingram

Money is often seen as one of the biggest problems with politics in the United States. This year, both major presidential candidates raised staggering amounts of money, with Obama having raised $1.08 billion and Romney, $1.13 billion, according to The Washington Post. With such a flood of money, it certainly seems like this money must be a key in winning elections, and that our politicians are up for sale. But how much does all that money matter really?

Throughout history there seems to be a general trend, though not a certainty, of the candidates who raise the most money winning their election. However, it is important to question whether or not raising money and winning the election are an example of causation, or merely correlation.

To understand the important difference between these two concepts, imagine a classroom. The teacher turns, goes to the wall and turns off the lights. As soon as the lights go off, a student sneezes. The events are correlated, one happened, then the other happened. But they lack causality. That the student sneezed when the lights went off was merely coincidental. It is with the question of causation, or just correlation that the money in politics should be approached.

The economist Steven D. Levitt, co-writer of the book “Freakonomics”, did a study on this issue, entitled: “Using Repeat Challengers to Estimate the Effect of Campaign Spending on Election Outcomes in the U.S. House”, in which Levitt attempted to isolate the effects of campaign spending by comparing candidates to themselves in different elections.

The main question was, do candidates who spend the most money usually win? Or do the most electable candidates also get the most people willing to give them money? Levitt’s findings strongly suggest the latter.

“When a candidate doubled their spending, holding everything else constant, they only got an extra 1 percent of the popular vote,” said Levitt, explaining his finding in a Freakonomics podcast. “It’s the same if you cut your spending in half, you only lose 1 percent of the popular vote. So we’re talking about really large swings in campaign spending with almost trivial changes in the vote.”

The candidates who are most likely to win attract the most money, but it is not the money that wins them the election.

Now it can be assumed that candidates need money to be elected. After all if no one knows who you are it makes it difficult to win. But the hundreds of millions of dollars that candidates are raising and spending seems absurdly excessive.