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Presidential Approval and Gasoline Prices

Posted By Barry Ritholtz On October 14, 2004 @ 8:58 am In Politics | Comments Disabled

We have previously dismissed suggestions that market performance [1] rises and falls in response to either candidates polling numbers. My conclusion was that the same underlying factors were impacting both the election race and the market [2]. This was due to the all too common analyst practice of confusing “Cause & Effect” [3]

Now we see a diffferent take which may actually have some resonance: The variation of this theme is comparing the Incumbent’s polled approval ratings with the price consumers’ pay for Gasoline. (via Professor Pollkatz [4])

click for larger chart
Newbushindex_28670_image001 [5]
Graphic courtesy Prof PollKatz [6]

There seems to be a fairly high correlation between the two, with perhaps a short lag. In these issues, the question is always: “What is the correlation, and is there a causative factor?”

In the rpesent case, the expectation of an incumbent getting blamed for high energy prices passes the sniff test.

Incidentally, the good Prof has a rather elegant solution to the issue of bad or biased polling: He maintains a “Pool of polls [7],” with every poll result simultaneously represented. It very cleverly solves a host of problems.

Lastly, for a host of polling details, I put together a full list of Presidential Polling Data Resources [8].


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

URL to article: http://www.ritholtz.com/blog/2004/10/presidential-approval-and-gasoline-prices/

URLs in this post:

[1] market performance: http://bigpicture.typepad.com/comments/2004/07/is_the_market_r.html

[2] election race and the market: http://bigpicture.typepad.com/comments/2004/07/confusing_polit.html

[3] confusing “Cause & Effect”: http://www.ritholtz.com/blog http://bigpicture.typepad.com/comments/2004/07/confusing_cause.html

[4] Professor Pollkatz: http://www.pollkatz.homestead.com/

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

[6] Prof PollKatz: http://www.pollkatz.homestead.com/files/NEWBUSHINDEX_28670_image001.gif

[7] Pool of polls: http://www.pollkatz.homestead.com/files/pollkatzmainGRAPHICS_8911_image001.gif

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

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