Update on effects of economy on political attitudes and behavior?

The other day we discussed some unresolved issues on how the state of the economy can affect voters’ attitudes. Here’s part of the story, but only part of it:

Individuals can feel one way even as averages are going in a different direction . . . In a recession, you see comments about people losing everything; here, the comments are more along the lines of, “It’s supposed to be an economic boom, but we’re still just getting by.” But, sure, if there’s an average growth of 2%, say, then (a) 2% isn’t that much, especially if you have a child or you just bought a new house or car, and (b) not everybody’s gonna be at that +2%: this is the average and roughly half the people doing worse than that. The point is that most people are under economic constraints, and there are all sorts of things that will make people feel these constraints–including things like spending more money, which from an economic consumption standpoint is a plus, but also means you have less cash on hand. . . .

People have this idea that a positive economy would imply that their economic constraints will go away–but even if there really is a 2% growth, that’s still only 2%, and you can easily see that 2% disappear cos you spent it on something. From the economist’s perspective, if you just spent $2000 on something nice, that’s an economic plus for you, but from the consumer’s point of view, spending that $2000 took away their financial cushion. The whole thing is confusing . . .

My point is not that people “should” be feeling one way or another, just that the link between economic conditions and economic perception at the individual level is not at all as direct as one might imagine based on general discussions of the effects of the economy and politics.

This makes me think that the view of the economy from the news media is important, as the media report hard numbers which can be compared from election to election.

I summarized:

My current take on the economy-affecting-elections thing is that, in earlier decades, economic statistics reported in the news media served as a baseline or calibration point which individual voters could then adjust based on their personal experiences. Without the calibration, the connection between the economy and political behavior is unmoored.

Another way to put it is that there is little difficulty in seeing the direct effect of economic changes on aggregate political attitudes. In general, if the economy is improving under some reasonable measure, then more people will be doing better and fewer people will be doing worse, and that should show up in average attitudes. It is, in political science jargon, a “valence” issue. The more difficult question is: How do economic differences between election years map to different political attitudes in these elections? As noted above, my best answer is that, in the past, people could use well-publicized economic statistics such as the unemployment and inflation rates to align their expectations across elections. But now the news media landscape is so fractured that this sort of aggregate calibration is no longer possible.

I was discussing this with a couple of political scientists today and they pointed me to the work of Mark Kayser, Michael Peress, and their collaborators. Here’s a link to some of their papers.

And here’s a paper by Bob Erikson from 2004 that I must have read at the time. It begins:

Many of the findings regarding economic voting derive from the micro-level analyses of survey data, in which respondents’ survey evaluations of the economy are shown to predict the vote. This paper investigates the causal nature of this relationship and argues that cross-sectional consistency between economic evaluations and vote choice is mainly if not entirely due to vote choice influencing the survey response. Moreover, the evidence suggest that apart from this endogenously induced partisan bias, almost all of the cross-sectional variation in survey evaluations of the economy is random noise rather than actual beliefs about economic conditions In surveys, the mean evaluations reflect the economic signal that predicts the aggregate vote. Following Kramer (1983), economic voting is best studied at the macro-level rather than the micro-level.

Lots to chew on here. Most of the time when we talk about the economy and voting, these issues never even come up. But they should.