Make of it what you will. HT: Deloitte Access Economics’ David Rumbens. And yet aggregate consumer sentiment is not much affected by a change of government:
Typically the data hasn’t shown big changes in sentiment in the lead up to an election. Instead, a switch in who is happy and optimistic tends to occur immediately following an election in which there is a change in government. While we may not see big movements in the overall level of the consumer sentiment index as a result of the election, the chart above clearly shows the importance of the political backdrop in influencing the optimism of particular consumers.
Interesting graph. My guess is that the business press is probably on average tilted towards the coalition so their reporting of the issue would be coloured by a confirmation bias that reinforced their own beliefs that confidence is up when the coalition is in power and that is more or less the story they tell.
Something smells wrong here, because this is just too clean…
The linked website didn’t say how they got the data, i.e. whether they are following people over time with fixed and known party loyalties or whether each survey anew people are asked for their political preferences. Their interpretation presumes the former, but one suspects the latter is the actual methodology, particularly from reading this oecd website as to what this survey does (which is running a new survey every month).
Thus there is the very real probability that people feeling less positive switch their loyalties to the opposition of the day, ie we might just be looking at rational voter intentions rather than tribalism-based feelings of optimism. So the conclusion these people draw from their study (“the chart above clearly shows the importance of the political backdrop in influencing the optimism of particular consumers”) is probably completely wrong. The causality probably goes the other way, at least on the margin (the disgruntled switch sides, rather than the losing side becoming disgruntled for 3 years in a row). You really wonder who makes up these ‘fact sheets’ and what their grasp of basic statistics is.
What he said.
But if it’s genuine, it’s a relationship I’ve never seen before and a great get by Rumbens.
Well, would it not be clean because of the pretty simple proposition that if people think that ‘their’ party is the better economic manager, and the opposing part is the worse manager, when there is a change in government there will automatically be a change in sentiment?
Otherwise you would have to believe that people will support a political party even if they think it is a worse economic manager. While I have seen plenty of posts where partisans for each party reckon ‘their’ party is a better economic manager, and some posts where people don’ care about economics, I have yet to see people praising their party for being an inferior economic manager.
That graph is pretty intuitive.
That website is here:
LOL – rational voter intentions! Under the present environment that’s impossible there simply isn’t enough information to have a rational choice. What issue would they make a “rational” choice based on? The size of the tents refugees will be housed in?
Michael, I suggest you google the term “mood affiliation”, it might be useful.