When the Fundamentals are Trumped: The 2008 Wall Street Meltdown Election and Election Forecasting
James E. Campbell
University at Buffalo, SUNY
APSA 2011 Annual Meeting Paper
An implicit assumption of many presidential election forecasting models is that the political fundamentals in place before the campaign are “played out” in the course of the campaign, that election results are largely unaffected by major unanticipated events during the campaign. In effect, the history of normal elections provides the basis for forecasting the next normal election. This has been generally a safe assumption. Though there have been numerous unexpected and major politically charged events in modern American political history, none had occurred during the period between when forecasts are made and Election Day - at least until 2008. In 2008, the assumption was violated. In mid-September of 2008, after the conventions and after most forecasts were made, the nation’s financial system collapsed. The Wall Street Meltdown and its devastating economic consequences were unexpected by the parties, the public, the economic forecasters, and the election forecasters. Many election forecasts, however, were fairly accurate in predicting a solid popular vote margin for Democrat Barack Obama. The reason for this accuracy, in the face of the unexpected meltdown, was that many of the models made a compensating second error by specifying retrospective evaluations to have the same consequences in open seat races as they have when incumbents are running. Moving forward, it is important both to address the specification issue and to treat the 2008 election as a case in which the fundamental assumption of forecasting models was violated.
Number of Pages in PDF File: 21
Keywords: elections, election forecasting, political economy
JEL Classification: E17, E66, H00working papers series
Date posted: August 1, 2011 ; Last revised: August 17, 2011
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