Thieme, Sebastian (2024) (When) are Lobbying Expenditures a Good Proxy for Lobbying Activity? IAST Working Paper, n. 24-160, Toulouse

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Abstract

Lobbying expenditures are widely used as a proxy variable for measuring lobbying ac-tivity. However, the validity of this approach has rarely been examined and existing justifications do not account for heterogeneity in lobbyist compensation formats. I address the question using unique lobbying disclosure data from Wisconsin, where lob-bying organizations report both hours worked and payments received by their lobbyists. Strong overall correlations between changes in expenditures and hours worked within organization-lobbyist dyads indicate that lobbying expenditures can serve as a reason-able proxy. However, caution is warranted due to substantial heterogeneity, with con-tract lobbyist relationships exhibiting weaker correlations than in-house relationships. I conclude by providing several suggestions to improve empirical analyses using lobbying expenditures.