How Presidential Popularity is Affected by Economic Trends

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How Presidential Popularity is Affected by
Economic Trends

• Dana Jupiter
• Christian Weeks
• Tim Yang
• 12/2/02

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Purpose

• To explore how trends in the economy affect
  presidential public approval.
• Null Hypothesis The economy does not influence
  presidential public approval.
• Alternate Hypothesis The economy does, in fact,
  influence presidential public approval.

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Procedure

• We decided to use four economic indexes, each of
  which individually reflect the strength of
  various sectors of the economy and together would
  provide an accurate representation of the economy
  as a whole.
• Data from 1948 was available to us through the
  Commerce and Labor Departments.

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Economic Data

• Real GDP The Gross Domestic Product adjusted for
  inflation measures the total amount of goods and
  services produced in the United States in a year.
  It is calculated by adding together the market
  values of all of the final goods and services
  produced in a year.
• Gross Private Domestic Investment The total
  amount of investment spending by businesses and
  firms located within the borders of a nation.
• Disposable Income Personal income after the
  payment of income, estate, certain other taxes,
  and payments to governments.
• Unemployment Rate The percentage of the U.S.
  labor force that is unemployed. It is calculated
  by dividing the number of unemployed individuals
  by the sum of the number of people unemployed and
  the number of people employed.
• We did not use Consumer Price Index (CPI)
  because the only data we found was unadjusted for
  inflation and therefore had no relevance in our
  study.
• All of the above data is from the U.S.
  Department of Labor Bureau of Statistics and U.S.
  Commerce Department Bureau of Economic Analysis

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Public Approval Data

• All of our presidential public approval data is
  from Congressional Quarterlys Vital Statistics
  on the Presidency, which had pubic approval
  ratings from Gallup polls from 1950 through 1998.

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Procedure Continued

• Based on the available data, we set the
  parameters for our study from 1950-1998 using
  quarterly data. This meant that we had to
  convert the monthly employment data for the four
  economic indicators from monthly values to
  quarterly averages. We also had to convert the
  presidential public opinion data into quarterly
  averages.
• Next, we entered the data into an Excel
  spreadsheet and calculated the changes in our
  variables by quarter so we could compare changes
  in presidential public approval with changes in
  the four economic indexes.

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Procedure Continued

• We removed data which corresponded to changes in
  administration after observing that a jump in the
  presidential public approval usually accompanied
  a change in presidency.
• When all the data was entered and adjusted for
  changes in administration, we had 182 data points
  for each comparison.
• The final step was to create scatter graphs.

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Results
  Graph R Value R2 Value P Value
1 Presidential Approval Real GDP (1950-1998) 0.2060 0.0425 0.0027
2 Presidential Approval Real GDP (1950-1998 minus Watergate) 0.1817 0.0330 0.0079
3 Presidential Approval Gross Domestic Private Investment (1950-1998) 0.1390 0.0194 0.0307
4 Presidential Approval Disposable Personal Income (1950-1998) 0.1450 0.0210 0.0258
5 Presidential Approval Unemployment (1950-1998) 0.1090 0.0119 0.0719
6 Presidential Approval Real GDP (1950-1959) 0.3580 0.1285 0.0136
7 Presidential Approval Real GDP (1960-1969) 0.0710 0.0051 0.3395
8 Presidential Approval Real GDP (1970-1979) 0.1620 0.0263 0.1653
9 Presidential Approval Real GDP (1980-1989) 0.4520 0.2044 0.0022
10 Presidential Approval Real GDP (1990-1998) 0.0685 0.0047 0.3546
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Results

• Average R value for our four economic indexes was
  0.1498
• Average R2 value for our four economic indexes
  was 0.0237

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Discussion

• Interpreting R and R2 values
• Interpreting P values
• The influence of Watergate and other political
  events
• Fluctuation presidential public approval and the
  economy in 10 year increments
• Future studies

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Conclusions

• The economy has a modest influence on
  presidential public approval.
• The influence of the economy on presidential
  public approval fluctuates over time and is
  influenced by external political events.
• The challenge for future studies that test the
  influence of the economy on presidential public
  approval will be to eliminate the influence of
  external political events that distort the true
  influence of the economy on presidential public
  approval.