This article analyzed the effect of campaign expenditure and demographic factors on election outcomes in the Canadian federal election of 2006, using OLS and instrumental variable regression models. The data is a cross-section of electoral districts in Canada. The study focuses on four parties that nominated candidates in most of the 308 electoral districts: Conservative, Liberal, Green, and NDP. It is found that campaign expenditure at district level is a significant determinant of a party’s share of the votes, but a candidate’s incumbency status and demographic factors are also important. The results show that low-income voters tend to favor the Liberals at the expense of the Conservatives. Expenditure by rival parties significantly reduces a party’s shares.
