irrational voters

Doug Henwood dhenwood at panix.com
Thu Jun 13 11:36:37 PDT 2002


"Are Voters Rational? Evidence From Gubernatorial Elections"

BY: JUSTIN WOLFERS

Stanford GSB

Document: Available from the SSRN Electronic Paper Collection:

http://papers.ssrn.com/paper.taf?abstract_id=305740

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Paper ID: Stanford GSB Research Working Paper No. 1730

Date: March 2002

Contact: JUSTIN WOLFERS

Email: Mailto:jwolfers at stanford.edu

Postal: Stanford GSB

518 Memorial Way

Stanford, CA 94305-5015 UNITED STATES

Phone: 650-725-7510

Fax: 650-725-7979

ABSTRACT:

Standard agency theory suggests that rational voters will vote

to re-elect politicians who deliver favorable outcomes. A second

implication is that rational voters will not support a

politician because of good outcomes unrelated to the

politician's actions. Specifically, rational voters should try

to filter signal from noise, both in order to avoid electing

incompetent, but lucky politicians, and to maximize the link

between their votes and optimal incentives. This paper provides

insight into the information processing capacities of voters, by

measuring the extent to which they irrationally reward state

governors for economic fluctuations that are plausibly unrelated

to gubernatorial actions. Simple tests of relative performance

evaluation reveal that voters evaluate their state's economic

performance relative to the national economy. However, these

tests only provide evidence of rule-of-thumb performance

filtering. More sophisticated tests reveal that voters in

oil-producing states tend to re-elect incumbent governors during

oil price rises, and vote them out of office when the oil price

drops. Similarly, voters in pro-cyclical states are consistently

fooled into re-electing incumbents during national booms, only

to dump them during national recessions. Consistent with an

emerging behavioral literature, this suggests that voters make

systematic attribution errors and are best characterized as

quasi-rational.

Keywords: Voting, rationality, elections, voter rationality,

state elections, economics and politics, voting models,

governors, behavioral economics, political economy



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