Regional Heterogeneity and U.S. Presidential Elections

73 Pages Posted: 19 Oct 2020

See all articles by Rashad Ahmed

Rashad Ahmed

Government of the United States of America - Office of the Comptroller of the Currency (OCC)

M. Hashem Pesaran

University of Southern California - Department of Economics

Date Written: 2020

Abstract

This paper develops a recursive model of voter turnout and voting outcomes at U.S. county level to investigate the socioeconomic determinants of recent U.S. presidential elections. It is shown that the relationship between many socioeconomic variables and voting outcomes is not uniform across U.S. regions. By allowing for regional heterogeneity and using high-dimensional variable selection algorithms, we can explain and correctly predict the unexpected 2016 Republican victory. Key factors explaining voting outcomes include incumbency effects, voter turnout, local economic performance, unemployment, poverty, educational attainment, house price changes, urban-rural scores, and international competitiveness. Our results corroborate evidence of ‘short-memory’ among voters: economic fluctuations realized a few months prior to the election are indeed powerful predictors of voting outcomes as compared to their longer- term analogues. The paper then presents real time forecasts for the 2020 U.S. Presidential Election based on data available at the end of July 2020 which are then updated based on data available as of midOctober.

Keywords: voter turnout, popular and electoral college votes, simultaneity and recursive identification, high dimensional forecasting models, Lasso, OCMT

JEL Classification: C530, C550, D720

Suggested Citation

Ahmed, Rashad and Pesaran, M. Hashem, Regional Heterogeneity and U.S. Presidential Elections (2020). CESifo Working Paper No. 8615, Available at SSRN: https://ssrn.com/abstract=3711891 or http://dx.doi.org/10.2139/ssrn.3711891

Rashad Ahmed (Contact Author)

Government of the United States of America - Office of the Comptroller of the Currency (OCC) ( email )

400 7th Street SW
Washington, DC 20219
United States

M. Hashem Pesaran

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall 300
Los Angeles, CA 90089
United States

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