Friday, August 13, 2004

All's Fair in Politics

All’s Fair in Politics

Economist Ray Fair’s very simple model on presidential elections has some interesting things to say about the upcoming election. Given the macro-economic and macro-political factors that have mattered in the past, George W. Bush should win between 57% and 58% of the popular vote, according to the model. Any way that this happens implies a large Electoral College victory for Bush.

Here is the main estimation equation:
VOTE = 55.57 + .691*GROWTH - .775*INFLATION + .837*GOODNEWS
You can simulate results by playing with your own assumed values here.

A note on the past: Fair’s model predicted that Gore would win the 2000 election….and since “win” is defined in terms of popular vote, he was right! The prediction was that the Dem candidate takes 50.8% of the two party vote. The actual number received by Gore was 50.3%; pretty impressive. (This factored in “no personality” for Gore, which usually means “not an incumbent” but since Gore actually had no personality was even more correct than usual)