Presidential approval and macroeconomic conditions: evidence from a nonlinear model. Issue 47 (7th October 2016)

• Record Type: Journal Article
• Authors: Choi, Seung-Whan; James, Patrick; Li, Yitan; Olson, Eric
• Is Part Of: Applied economics. Volume 48:Issue 47(2016)
• Page Start: 4558
• Page End: 4572
• Publication Date: 2016-10-07
• Subjects: Presidential approval -- nonlinear -- inflation -- unemployment; B22 -- C22 -- A12; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2016.1161718
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: Contrary to previous empirical studies that find a linear link between economic conditions and presidential approval, this study argues for and finds a nonlinear relationship. A threshold regression is used to assess potential nonlinear relationships between macroeconomic variables and presidential popularity. A quarterly data analysis for the 1960Q1–2012Q2 time period reveals that domestic factors prevail in shaping presidential approval. Most compelling is evidence of a threshold relationship involving economic conditions: When unemployment is slightly over 7%, its decline impacts significantly and favourably on presidential approval, an effect that virtually disappears below the threshold value. Change in consumer sentiment affects presidential approval in a limited way, while inflation shows no association at all. These results combine to encourage further investigation of nonlinear processes in the nexus of economics and politics.