Tag Archives: politics

Voting with Your Wallet II: Education, Liberalism, and Unemployment

Last time I talked about an apparent positive relationship between state unemployment rates and state support for President Obama in political polls. This despite the conventional wisdom that Americans vote with their wallets. That would suggest that states with higher unemployment rates should be less likely to support an incumbent President.

I have to be honest. I started this thinking that the positive relationship was just a fluke. That it was really just a sort of anomaly that would go away if I included the right other variables. So I did what any good data analyst would do in the situation. I played with my data. That is to say, I added other variables, tried this and that, checked correlations here, ran regressions there.

And it didn’t turn out the way I expected.

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Again, my Economical Oath requires me to point out in advance that there are assorted technical issues with approaching this problem this way. But that doesn’t mean we can’t learn some interesting things from it. Virtually every economic analysis has technical problems with it; it’s mostly a matter of degree.

“Regression” is an intimidating term to many people. It sounds all complicated and statistical. All it really means is trying to find out how a some numbers affect other numbers. Practically speaking, it’s just using a computer to do calculations – you can even do it in Excel.

In addition to correlations, I used simple regression analysis to look at the relationships here. In the end, you come out with an equation that represents the relationships, along with numbers that tell you how good the relationships are, statistically-speaking.

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Bbefore I tell you about the relationships that I found, let me first tell you about the variables that didn’t work.

First, the percentage of the states’ populations that are black. Virtually no relationship to speak of – a correlation of -0.002. Likewise percentage Latino had a correlation of 0.18, but this went away after taking account of other factors.

Percentage urban versus rural, percentage with a Bachelor’s degree, population, population density, even acres of farmland – all of these have some correlation with support for Obama, but all of these apparent relationships proved small or insignificant when other variables were included.

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Including the state median family income looked really good at first. And in fact it made the state unemployment rate look even more important, statistically. A $1000 increase in a state’s median family income  was associated with a 0.5 percent increase in support for Obama.

But it turns out that family income was just capturing something else: the effects of advanced college degrees. States with a larger percentage of people with masters and doctor’s degrees have higher family incomes. And it’s those advanced degrees that really are associated with more support for Obama.

Education really does make you liberal. Or, properly speaking, appears to make you more likely to support the more liberal candidate. In this case, anyhow.

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So shut up and cut to the chase. What’s the bottom line?

After looking at more than a dozen different variables, here’s the equation that turned out to explain the most differences in state support for Obama in the best statistical way:

By “religiosity”, I mean the percentage of the state population who say that religion is very important in their lives. I used state data from 2007 Pew Research survey for this. My thinking was that many people base their political views on their religious faith, and that this might explain some of the differences in support for Obama.

And it does. For every 5 percent increase in state religiosity, support for Obama decreases by 1 percent, and that relationship is statistically significant. In other words it isn’t just be caused by random factors.

For the curious, the R-squared for this equation was 0.54, meaning these variables explain 54 percent of the differences in state support for Obama — not too shabby for a back-of-the-cocktail-napkin analysis. All three variables were significant at the 0.05 level.

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In the end, including percentage with advanced degrees and religiosity in the equation made the relationship between state unemployment rate and support for Obama look even better than it did without them. In fact, no matter what variables I included, there still was a positive relationship between unemployment and Obama support.

So the relationship that I didn’t think existed, the one that I thought would go away if I included the right variables, turns out to be pretty solid. Higher unemployment rates do seem to be associated with more support for President Obama.

Maybe Americans do vote with the wallets, only not the way you might think.

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Do Americans Vote With Their Wallets? State Unemployment Rates and Support for the Incumbent

Americans vote with their wallets, or at least that’s the conventional wisdom. Economic issues are supposed to be of primary concern to American voters. Or, as Bill Clinton’s presidential campaign famously put it in 1992, “It’s the Economy, Stupid.”

I avoid politics here – it’s not that kind of blog – but sometimes it’s impossible to separate economy from political economy, particularly in an election year. So I decided to take a look at this piece of conventional wisdom. In a non-partisan sort of way.

If the economy really is key to American voters, then one might expect that – all else being equal – states with high unemployment rates should be less likely to support the incumbent (Obama), and states with low unemployment rates should be more like to support him.

Put another way, there should be a negative correlation between support for the incumbent and state unemployment rate. A graph of states with support for Obama on one axis and state unemployment rate on the other should tend to slope downward.

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The economists’ union requires that I preface this with caveats: There are various technical issues with analyzing aggregate data this way, and this is not intended to be a scientific study. That said, back-of-the-cocktail-napkin analyses can still be interesting and enlightening.

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Correlations are measures of how much two sets of numbers tend to move in the same or opposite directions. A correlation of 0 means there’s no relationship, close to -1 means the two move in opposite directions, and close to 1 means there’s a strong positive relationship. In this case, we’re expecting a negative number.

The correlation between state support for Obama and state unemployment rate actually turns out to be positive 0.27. This means that – all else being equal – the higher the unemployment rate in a given state, the higher the support for President Obama. The opposite of what we’d expect, if economic issues are driving voter preferences.

(Note: I used FiveThirtyEight’s unadjusted average poll numbers by state, simply because they were available in an easy-to-use format. The numbers were as of 3:00 pm on 28 October. The unemployment rates are those for September 2012, from the Bureau of Labor Statistics, bls.gov.)

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Correlations are rather unexciting to many people. After all, they’re just numbers. A mentor of mine used to recommend an alternative technique that he called, “Look at your data”. So here’s a – yes, I am an economist – graph of state preference for Obama versus state unemployment rate.

As suggested by the positive correlation, the data points do tend to slope upward. The best fitting line is shown, and it has a positive slope too.

States such as Rhode Island, California, New Jersey, and Nevada have relatively high unemployment rates and yet have relatively large percentages supporting Obama. States such as North Dakota, Nebraska, and Oklahoma have low unemployment rate yet have smaller percentages supporting Obama.

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What gives? Is the conventional wisdom about Americans voting with their wallets wrong? Is it not the economy, stupid? Does high unemployment actually cause people to prefer the incumbent?

That’s hard to say. Political preferences are complex, and many factors combine and interact to determine an individual’s political views. It gets even more complicated when you consider things at the state level.

It’s possible that higher unemployment rates really do cause people to support this incumbant. Perhaps people who are unemployed are more likely to prefer Obama because they believe, for whatever reason, that they personally will be better off if he is re-elected. On the other hand, it’s also possible that other factors are affecting both unemployment rates and political preferences, making it appear that higher unemployment rates are causing people to support Obama.

Whatever the details, it’s clear that saying money is all that matters to American voters vote is too simplistic. Maybe Americans do vote with their wallets, but that could mean voting for the candidate they believe is most likely to fill them.

More on this Topic: Voting With Your Wallet II: Education, Liberalism, and Unemployment