The American Voter Goes Shopping: Micro-Foundations of the Partisan Economy

Abstract

While research shows that partisanship influences beliefs about the economy, it is yet to be established whether individual partisans engage in systematically different economic behaviors. Focusing on consumer behavior, the single largest determinant of economic activity in the United States, we develop a model of voters whose purchasing behavior is driven, in part, by their politically induced evaluations of macroeconomic conditions. We hypothesize that partisans will engage in systematically different consumption patterns of everyday goods, depending on whether their preferred party is in charge of economic policy. To evaluate whether partisan influences on consumer sentiment translate into partisan differences in consumer behavior, we utilize aggregate surveys of economic opinions, as well as individual-level surveys conducted before and after the 2000 presidential election of 26,000 respondents who provide detailed data about variety of economic behaviors. Our results show that Republicans had consistently more positive evaluations of the economy than Democrats, and this partisan gap in evaluations became more pronounced in the aftermath of the 2000 election. Moreover, our analyses of consumption behavior before and after the election show that elections indeed induce partisan divergence in how partisans consume, but these effects are modest and short lived.