National Economic Voting in U.S. Presidential Elections

1. 1
National Economic Voting in
U.S. Presidential Elections
Jyung-Ho Yang

2. Voter Measures of the national Economy
National Economic Voting and Survey Research Design
National Economic Voting and Electoral Institutions
National Economic Voting, Incumbency and the Time Horizon
2
Introduction
Conclusion
Table of Contents

3. 3
Introduction
Research Questions
▪ Retrospective or prospective?
- Both of them
▪ What is the role of institutions?
- Institutions direct results
▪ Which economic indicators?
- Amalgamation of voter perceptions and collective economy
▪ How large does national economy effects?
- New index: National Business Index (NBI)
▪ Subjective or objective measures?
- Statistical results without statistical results

4. Voter Measures of the national Economy
Background
4
▪ Voting choice arises from mixture of individual perceptions and preferences
- Annual GNP (or GDP)
- Disposable income
- Inflation
- Unemployment
- Leading indicators
▪ Micro Interview
- Jane Smith: economic growth > unemployment rate
- Betty Brown: unemployment > inflation, trade deficit,

5. Voter Measures of the national Economy
Background (Cont)
5
“Only models with carefully built general economic indicators
can hope to capture the shifting weighting scheme utilized
in the political economic calculus of the democratic voter.”
- Lewis-Beck(1991, 5)

6. Voter Measures of the national Economy
New Index: NBI
6
TABLE 1
A National Business Index and
Disposable Personal Income Change,
Presidential Election Years 1956–1996
Year
National
Business Index
Real Disposable Per Capita
Personal Income Change
1956 15 2.9
1960 Ϫ16 0.1
1964 32 5.5
1968 26 2.9
1972 29 3.2
1976 14 2.6
1980 Ϫ48 Ϫ1.1
1984 40 4.9
1988 20 2.9
1992 Ϫ21 1.7
1996 28 2.0
Mean 10.8 2.5
S.D. 27.3 1.9
Data Sources: The NBI was constructed from the Surveys of Con-
sumer Attitudes and Behavior, University of Michigan, for the last quar-
Richard Nadeau and Michael S. Lewis-Beck
▪ How to measure?
better= +1
Worse= -1
Same= 0
1. Scoring
2. Calculation
% of Worse- % of Better
3. When
Last quarter of every election year

7. 7
National Economic Voting and
Survey Research Design
Background
▪ Assumption
- In election years in which the NBI is above average, we expect
individual voters will increase their support of the incumbent party.
▪ Hypothesis model
Vote= a + Personal Finances + Real Disposable Income + Incumbent Party
+ (Party ID X Incumb. Party) +(Race X Incumb Party)

8. 8
National Economic Voting and
Survey Research Design
Results
▪ Formula
Vote= a + Personal Finances + Real Disposable Income + Incumbent Party
+ (Party ID X Incumb. Party) +(Race X Incumb Party)
TABLE 2
Comparing Two National Economic Conditions Measures in
a Presidential Voting Model, OLS Estimates, 1956–1996
Variable (1) (2) (3) (4) (5)
RDI .0023** .0026** Ϫ.0017 Ϫ.0036
(.002) (.002) (.004) (.004)
NBI .0019** .0015** .0020**
(.000) (.000) (.000)
Personal Finances .0041** .0040**
(.004) (.004)
Incumbent Party Ϫ.053** Ϫ.059** Ϫ.060** Ϫ.055** Ϫ.060**
(.004) (.004) (.004) (.004) (.004)
Party ID ϫ Incumb. .139** .138** .139** .140** .139**
(.001) (.001) (.001) (.001) (.001)
Race ϫ Incumb. .165** .178** .178** .178** .178**
(.010) (.010) (.010) (.010) (.010)
Constant .460** .462** .502** .493** .505**
(.006) (.006) (.008) (.008) (.004)
Adj. R2
.50 .48 .49 .51 .49
N 11969 12991 12991 11969 12991
Data and Measures: The survey data are pooled from the ANES, which bears no responsibility
National Economic Voting in U.S. Presidential Elections 165

9. 9
National Economic Voting and
Survey Research Design
Results (Cont)
TABLE 2
Comparing Two National Economic Conditions Measures in
a Presidential Voting Model, OLS Estimates, 1956–1996
Variable (1) (2) (3) (4) (5)
RDI .0023** .0026** Ϫ.0017 Ϫ.0036
(.002) (.002) (.004) (.004)
NBI .0019** .0015** .0020**
(.000) (.000) (.000)
Personal Finances .0041** .0040**
(.004) (.004)
Incumbent Party Ϫ.053** Ϫ.059** Ϫ.060** Ϫ.055** Ϫ.060**
(.004) (.004) (.004) (.004) (.004)
Party ID ϫ Incumb. .139** .138** .139** .140** .139**
(.001) (.001) (.001) (.001) (.001)
Race ϫ Incumb. .165** .178** .178** .178** .178**
(.010) (.010) (.010) (.010) (.010)
Constant .460** .462** .502** .493** .505**
(.006) (.006) (.008) (.008) (.004)
Adj. R2
.50 .48 .49 .51 .49
N 11969 12991 12991 11969 12991
Data and Measures: The survey data are pooled from the ANES, which bears no responsibility
for the analysis or interpretations given herein. The dependent variable is a presidential vote dichot-
omy (1 ϭ incumbent party candidate, 0 ϭ candidate of the other major party). The other variables
are coded as follows: Incumbent Party (ϩ1 ϭ Democratic president, Ϫ1 ϭ Republican president);
Party ID (Strong Republicans ϭ Ϫ3, Weak and Leaning Republicans ϭ Ϫ2, Independents ϭ 0, Weak
and Leaning Democrats ϭ ϩ2, Strong Democrats ϭ ϩ3); Race (1 ϭ nonwhite, 0 ϭ white); Per-
sonal Finances (ϩ1 ϭ see their own situation is “better,” 0 ϭ “the same”, Ϫ1 ϭ “worse.”). Mea-
National Economic Voting in U.S. Presidential Elections 165
NBI: 0.0020*1SD (27.3)*100 = 5.46%
RDI: 0.0026*1SD (1.9)*100 = 4.94%

10. 10
National Economic Voting and
Survey Research Design
Controversies
▪ ANES Sociotropic item
- Which has essentially the same phrasing, to construct the NBI
▪ Probit or Logistic Regression
▪ Simultaneous equation bias from the NBI measures?
- Such a link between partisanship and economic perception would bias
- “Little practical difference.”

11. 11
National Economic Voting and
Electoral Institutions
Background
▪ Responsibility of economic outcome
- Dear President
▪ Uncertainty
- The Congress, the Federal Reserve, and the President are all political economic actors
▪ 5 and 6
- 5: no elected president running
Expectation;
‘Is that partisan unity of government increases,
economic voting will increase’
- 6: elected president running for a second term

12. 12
National Economic Voting and
Electoral Institutions
Hypothesis
▪ 2 Independent variables
- Divided Government
‘When an elected President is not running,
economic voting will be weaker’
- Electoral Incumbent Candidacy

13. 13
National Economic Voting and
Electoral Institutions
Results
‘When an elected President is not running,
economic voting will be weaker’
TABLE 3
National Economic Voting and Electoral Institutions
OLS Logit
Variable (1) (2) (1a) (2a)
NBI .0022** .0024** .017** .019**
(.000) (.000) (.002) (.001)
NoDivided ϫ NBI Ϫ.0005 Ϫ.004
(.000) (.002)
NoDivided Ϫ.023 Ϫ.188
(.014) (.115)
No Inc Run ϫ NBI Ϫ.0014** Ϫ.013**
(.000) (.004)
No Inc Running Ϫ.022* Ϫ.148
(.009) (.067)
Incumbent Party Ϫ.050** Ϫ.049** Ϫ.368** Ϫ.358**
(.006) (.005) (.050) (.034)
Party ID ϫ Incumbent Party (.139)** .139** .784** .791**
(.001) (.001) (.013) (.013)
Race ϫ Incumbent Party (.179)** .178** 1.67** 1.68**
(.010) (.010) (.103) (.104)
Constant .512** .524** .123 .206*
(.007) (.005) (.058) (.037)
Adj. R2
.49 .49
Percent predicted 82.9 82.8
N 12991 12991 12991 12991
Data and Measures: NBI, Incumbent Party, Party ID ϫ Incumbent Party, Race ϫ Incumbent Party
172 Richard Nadeau and Michael S. Lewis-Beck

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