Partisan Bias, Economic Expectations, and Household Spending

48 Pages Posted: 21 Jun 2015 Last revised: 12 Apr 2018

Atif R. Mian

Princeton University - Department of Economics; Princeton University - Woodrow Wilson School of Public and International Affairs; NBER

Amir Sufi

University of Chicago - Booth School of Business; NBER

Nasim Khoshkhou

Argus Information and Advisory Services

Multiple version iconThere are 2 versions of this paper

Date Written: April 4, 2018

Abstract

The well-documented rise in political polarization among the U.S. electorate over the past 20 years has been accompanied by a substantial increase in the effect of partisan bias on survey-based measures of economic expectations. Individuals have a more optimistic view on future economic conditions when they are more closely affiliated with the party that controls the White House, and this tendency has increased significantly over time. Individuals report a large shift in economic expectations based on partisan affiliation after the 2008 and 2016 elections, but administrative data on spending shows no effect of these shifts on actual household spending.

Keywords: consumer confidence, government, economic, policy, sentiment, news, noise, spending, consumption, elections, voting, polarization, Trump, elections

JEL Classification: E20, E21, E60

Suggested Citation

Mian, Atif R. and Sufi, Amir and Khoshkhou, Nasim, Partisan Bias, Economic Expectations, and Household Spending (April 4, 2018). Fama-Miller Working Paper; Chicago Booth Research Paper. Available at SSRN: https://ssrn.com/abstract=2620828 or http://dx.doi.org/10.2139/ssrn.2620828

Atif R. Mian

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

Princeton University - Woodrow Wilson School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

NBER

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Amir Sufi (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

NBER

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nasim Khoshkhou

Argus Information and Advisory Services ( email )

1 N Lexington Avenue
17th Floor
White Plains, NY 10601
United States

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