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News Link • Voting and Elections

Social Science Research Network article by Bob Prechter et al on Elections and Voting Results

Social Mood, Stock Market Performance and U.S. Presidential Elections: A Socionomic Perspective on Voting Results

Robert R. Prechter Jr.
Socionomics Institute

Deepak Goel
Socionomics Institute

Wayne D. Parker
Emory University School of Medicine ; Socionomics Foundation

Matthew Lampert
University of Cambridge ; Socionomics Institute

August 16, 2012

We analyze all U.S. presidential re-election bids and find a positive, significant relationship between the incumbent’s vote margin and the prior net percentage change in the stock market. This relationship does not extend to the incumbent’s party when the incumbent does not run for re-election. We find no significant relationships between the incumbent’s vote margin and inflation or unemployment. GDP is a significant predictor of incumbents’ popular vote margin in simple regression but is rendered insignificant when combined with the stock market in multiple regression. Egotropic and sociotropic voting hypotheses fail to account for the findings. The results are consistent with socionomic voting theory, which includes the hypotheses that (1) social mood as reflected by the stock market is a more powerful regulator of re-election outcomes than economic variables such as GDP, inflation and unemployment and (2) voters unconsciously credit or blame the leader for their mood. 

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