The 1992 Canadian Constitutional Referendum: Using Financial Data to Assess Economic Consequences

Abstract

Throughout their campaign, proponents of the Charlottetown Accord warned of the financial disaster that would strike if the accord were rejected. Those opposed to it dismissed this claim as a scare tactic. This paper investigates if and how investors responded to new information regarding the probability of a YES vote during the campaign period. Four measures of this probability are constructed from opinion poll data. Based on evidence from the money and the stock markets, the analysis confirms that the proponents of the accord had indeed overestimated the adverse impact of a NO vote. Moreover, stock market participants might have processed poll information in a less sophisticated manner than expected.