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Partisan Bias, Economic Expectations, and Household Spending

Author

Listed:
  • Atif Mian

    (Princeton & NBER)

  • Amir Sufi

    (Chicago Booth & NBER)

  • Nasim Khoshkhou

    (Synchrony Financial)

Abstract

The well-documented rise in political polarization among the U.S. electorate over the past 20 years has been accompanied by a substantial increase in the effect of partisan bias on survey-based measures of economic expectations. Individuals have a more optimistic view on future economic conditions when they are more closely affiliated with the party that controls the White House, and this tendency has increased significantly over time. Individuals report a large shift in economic expectations based on partisan affiliation after the 2008 and 2016 elections, but administrative data on spending shows no effect of these shifts on actual household spending.

Suggested Citation

  • Atif Mian & Amir Sufi & Nasim Khoshkhou, 2023. "Partisan Bias, Economic Expectations, and Household Spending," The Review of Economics and Statistics, MIT Press, vol. 105(3), pages 493-510, May.
    • Handle: RePEc:tpr:restat:v:105:y:2023:i:3:p:493-510
    DOI: 10.1162/rest_a_01056
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    Cited by:

    1. John M. Barrios & Yael Hochberg, 2020. "Risk Perception Through the Lens of Politics in the Time of the COVID-19 Pandemic," NBER Working Papers 27008, National Bureau of Economic Research, Inc.
    2. Hector H. Sandoval & Anita N. Walsh, 2024. "Sentiments and spending intentions: Evidence from Florida," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1046-1073, July.
    3. Ke, Da, 2024. "Left behind: Partisan identity, stock market participation, and wealth inequality," Journal of Banking & Finance, Elsevier, vol. 164(C).
    4. Meng, Yun & Pantzalis, Christos & Park, Jung Chul, 2023. "Why corporate political geography matters for stock returns," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 71-96.

    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D19 - Microeconomics - - Household Behavior - - - Other
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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