Policy In uence and Private Returns from Lobbying in the Energy Sector

In this paper, I quantify the extent to which lobbying expenditures by rms a ect policy enactment. To achieve this end, I construct a novel dataset containing all federal energy legislation and lobbying activities by the energy sector during the 110th Congress. I then develop and estimate a game-theoretic model where heterogeneous players choose lobbying expenditures to a ect the probability that a policy is enacted. I nd that the e ect of lobbying expenditures on a policy's equilibrium enactment probability to be statistically signi cant but very small. Nonetheless, the average returns from lobbying expenditures are estimated to be over 130 percent.