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Chart of the Week: Gasoline $ versus Incumbent Approval Ratings

Posted By Barry Ritholtz On October 15, 2004 @ 11:55 am In Finance | Comments Disabled

For those of you who would like a simple thesis for predicting the outcome of the election – one that is both highly correlated and has a strong causative element – we suggest the chart below, courtesy of DePaul University economics Professor Stuart Eugene Thiel. The professor plotted the weekly US gasoline prices (inverted) versus a Presidential Index. As the chart reveals, gasoline prices are coincident indicators to the incumbent’s approval rating.

Gasoline $ versus Incumbent Approval Ratings
click for larger chart
Newbushindex_28670_image001 [1]
Source: Pollkatz.homestead.com [2]

We are a nation of drivers. “Pump pain” erodes consumer’s confidence, reduces discretionary spending, and crimps family budgets. As a predictive factor in the Presidential election, the higher gasoline prices are, the greater the negative impact it is likely to have for the incumbent.

Random Items:
A 100-year bear market? [3]
The Long Tail [4]
After Iraq, Iran? [5]
Target Iran – Air Strikes [6]
Why Bush and Kerry are Wrong on Health Care [7]
Seymour Hersh spills his guts [8]
Presidential Polling Data Resources [9]

Quote of the Day:
“With enough inside information and a million dollars, you can go broke in a year.
-Warren Buffett.

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/10/chart-of-the-week-gasoline-versus-incumbent-approval-ratings/

URLs in this post:

[1] Image: http://bigpicture.typepad.com/photos/uncategorized/newbushindex_28670_image001.gif

[2] Pollkatz.homestead.com: http://www.pollkatz.homestead.com/files/NEWBUSHINDEX_28670_image001.gif

[3] A 100-year bear market?: http://cbs.marketwatch.com/news/story.asp?guid=%7B22FAA4CB%2D5C51%2D4009%2DB53F%2D8CC626BD269D%7D&siteid=mktw

[4] The Long Tail: http://www.wired.com/wired/archive/12.10/tail.html

[5] After Iraq, Iran?: http://fbc.binghamton.edu/146en.htm

[6] Target Iran – Air Strikes: http://www.globalsecurity.org/military/ops/iran-strikes.htm

[7] Why Bush and Kerry are Wrong on Health Care: http://knowledge.wharton.upenn.edu/article/1051.cfm

[8] Seymour Hersh spills his guts: http://www.berkeley.edu/news/media/releases/2004/10/11_hersh.shtml

[9] Presidential Polling Data Resources: http://bigpicture.typepad.com/comments/2004/08/presidential_po.html

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