Presidential Approval Models Revisited: A New Perspective

Abstract

Use of quarterly economic data in presidential job approval models implies that polls are reactions, in part, to quarterly economic performance. Perhaps this implication is not intended but it is due to the availability of low frequency economic data. We argue that voters have a shorter reaction time and do not wait for periodic data while the economy is in motion. We suggest the use of high frequency financial variables that proxy past, present and expected economic performance. Since opinions are formed based on continuous information, we also suggest employing Geweke type instantaneous feedback as well as traditional Granger type sequential causal feedback. The results show that for presidential candidates, weekly financial risk may be just as important as quarterly GDP growth or monthly unemployment.

Keywords: Presidential job approval, economic performance, financial markets, financial risk, instantaneous feedback

JEL Classification: D72, P16