Does the Misery Index Influence a U.S. President’s Political Re-Election Prospects?

Research has not yet explored whether the misery index or presidential rhetorical optimism about economic conditions can shape public opinion about the appropriate level of government involvement in domestic affairs in the United States. The time series analyses preformed here suggest prior change in the misery index and presidential rhetorical optimism about the economy produce shifts in public opinion, although the magnitude of the shift following changes in the misery index appears to be less substantial than the shift following changes in presidential rhetorical optimism about the economy.

Applied Economics, 2016

Contrary to previous empirical studies that find a linear link between economic conditions and presidential approval, this study argues for and finds a nonlinear relationship. A threshold regression is used to assess potential nonlinear relationships between macroeconomic variables and presidential popularity. A quarterly data analysis for the 1960Q1-2012Q2 time period reveals that domestic factors prevail in shaping presidential approval. Most compelling is evidence of a threshold relationship involving economic conditions: When unemployment is slightly over 7%, its decline impacts significantly and favourably on presidential approval, an effect that virtually disappears below the threshold value. Change in consumer sentiment affects presidential approval in a limited way, while inflation shows no association at all. These results combine to encourage further investigation of nonlinear processes in the nexus of economics and politics.

European Journal of Political Economy, 1989

Political Behavior, 1979

The relationship between the economy and the political fate of incumbents is reexamined empirically by proposing seven multivariate statistical models representing major approaches found in the literature. These models are tested empirically to determine the influence of aggregate economic conditions on presidential popularity as measured by Gallup Poll data from 1950 to 1974. Analysis suggests (1) that inflation and military expenditures constitute consistently significant influences on popularity and (2) that this influence is best detected in an Almon distributed-lag model which allows for an initial political response that increases cumulatively and remains slrong for several months before diminishing. V. O, Key's (1964) characterization of the American electorate as a "god of vengeance and of reward" aptly captures the central notion in the debate concerning possible economic influences on political support--the belief that citizens punish incumbent political authorities in times of economic adversity and reward them in times of economic prosperity. This belief that there is a positive relationship between the economy and the political fate of incumbents has been the accepted political wisdom since the shift in political loyalties inspired by the Depression. The only real disagreements have been over the exact nature and direction of the economy's influence.

2014

4 Abstract: The misery index (the unweighted sum of unemployment and inflation rates) was probably the first attempt to develop a single statistic to measure the level of a population's economic malaise. In this letter, we develop a dynamic approach to decompose the misery index using two basic relations of modern macroeconomics: the expectations-augmented Phillips curve and Okun's law. Our reformulation of the misery index is closer in spirit to Okun's idea. However, we are able to offer an improved version of the index, mainly based on output and unemployment. Specifically, this new Okun's index measures the level of economic discomfort as a function of three key factors: (1) the misery index in the previous period; (2) the output gap in growth rate terms; and (3) cyclical unemployment. This dynamic approach differs substantially from the standard one utilised to develop the misery index, and allow us to obtain an index with five main interesting features: (1) it f...

The Elgar Companion to Public Economics, 2006

This study empirically investigates whether the performance of the S&P 500 stock index, whose performance is treated as a surrogate for the performance of domestic stock/equity markets generally, influences the Presidential approval rating. After allowing for a variety of political factors and economic factors in addition to the S&P 500 stock index, it is found that the Presidential approval rating is indeed significantly enhanced by increasing values for this indicator of equity performance.

The Social Science Journal, 2000

This paper theorizes that the best way to empirically understand the president as a product is to look at the office and its occupant as a consumer product, in terms of the response of the consumers, citizens, to the product as measured by popularity. A substantial amount of literature has investigated the link between time, economics, and dramatic events to understand how those variables affect presidential approval ratings. However, there are conflicting views as to whether or not time, independently of other variables, has an effect on presidential approval. This study reconstructs the nature of that relationship between time and presidential approval ratings, testing for the relationship between presidential approval and time as a two-curve relationship. This relationship is analogous to the product life-cycle curve for commercial products. Substantial support is found for this hypothesized two-curve relationship. The results substantiate that the relationship between the citizenry and the modern president is the same as their relationship to consumer products. Future research must include time as the primary variable in our understanding of the modern market presidency. This additional study would not only substantiate the findings that presidential approval ratings follow a product life-cycle three-stage two-curve relationship, but would help develop a more concrete definition of the modern presidency.

Cogent Economics & Finance, 2014

The misery index (the unweighted sum of unemployment and inflation rates) was probably the first attempt to develop a single statistic to measure the level of a population's economic malaise. In this letter, we develop a dynamic approach to decompose the misery index using two basic relations of modern macroeconomics: the expectations-augmented Phillips curve and Okun's law. Our reformulation of the misery index is closer in spirit to Okun's idea. However, we are able to offer an improved version of the index, mainly based on output and unemployment. Specifically, this new Okun's index measures the level of economic discomfort as a function of three key factors: (1) the misery index in the previous period; (2) the output gap in growth rate terms; and (3) cyclical unemployment. This dynamic approach differs substantially from the standard one utilised to develop the misery index, and allow us to obtain an index with five main interesting features: (1) it focuses on output, unemployment and inflation; (2) it considers only objective variables; (3) it allows a distinction between short-run and long-run phenomena; (4) it places more importance on output and unemployment rather than inflation; and (5) it weights recessions more than expansions.

2016

Presidential traits (i.e. morality, intelligence, leadership) have generally been assumed to be idiosyncratic personal characteristics of the individual and are treated as exogenous from other political and economic factors. Prior literature has shown that presidential characteristics and economic performance are important elements of vote choice and approval. Using ANES data from 1984 to 2008, we demonstrate an important link between these factors, showing that objective and subjective indicators of economic performance are significant predictors of trait evaluations. Specifically, evaluations of the incumbent president at election time are directly related to changes in economic performance earlier in the year. The effects of economic performance are not isolated to retrospective policy evaluations, but also influence the overall evaluation of the president as a person.

Can public support for recent presidents be explained by long-held findings in the presidential approval literature? The presidencies, of Clinton, George W. Bush, Obama, and Trump seem to counter the existing literature, suggesting that recent approval ratings have become disconnected from the political environment. We synthesize prior scholarship on the environmental connection, salience, and economic handling to develop a general model to evaluate approval during the 1992-2020 period. The model estimates show the environmental connection remains intact. Looking at these four presidents together, we find the public punished and rewarded presidents in a manner consistent with the long-held findings of the literature. Even though each of these four presidents served in unique circumstances, the foundation of the public’s approval remained consistent. Our results point to an enduring environmental connection that holds presidents accountable for the conditions of the day.