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Chart of the Week: Gasoline $ versus Incumbent Approval Ratings

Friday, October 15, 2004 | 11:55 AM

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

Source: Pollkatz.homestead.com

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.

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» Causation & Correlation: Gasoline vs. Incumbency from BOPnews
With the debates now behind us, voters (and investors) can expect to hear a spate of “suspect” theories from political analysts assessing each candidate’s chances for electoral victory. Most of these will be rife with illogical, poorly reasoned, partis... [Read More]

Tracked on Oct 15, 2004 12:21:46 PM