THE POLARIZATION EFFECT

The unexpected closeness of all four presidential elections since 1996 suggests that growing partisan polarization is resulting in a decreased advantage for candidates favored by election fundamentals including first-term incumbents. This change is the product of a close division between party supporters within the electorate and a decrease in the willingness of voters to cross party lines to vote for any candidate from the opposing party including an incumbent. As a result, election outcomes tend to reflect the underlying division between supporters of the two major parties.

The data displayed in table 1 show that when we group the 16 presidential elections that have taken place since World War II into four sets of four consecutive elections, 1948–1960, 1964–1976, 1980–1992, and 1996–2008, the last four elections have had by far the closest average victory margins and smallest average interelection party swings. In fact, the last four presidential elections have produced the closest average victory margins and the smallest average interelection swings of any four consecutive elections in the past century. Most of the presidential elections in the past century have not been very close and large interelection swings have been common. The current situation is quite unusual.

Table 1

Average Margin of Victory and Average Interelection Party Swing in Postwar Presidential Elections

Note: Margin based on overall vote; swing based on Democratic or Republican share of major party vote.

Source: Data compiled by author.

To incorporate the polarization effect into the Time for Change Model, I added a new predictor (POLARIZATION) for elections since 1996. For elections since 1996, the polarization variable takes on the value 1 when there is a first-term incumbent running or in open-seat elections when the incumbent president has a net approval rating of greater than zero; it takes on the value −1 when there is not a first-term incumbent running and the incumbent president has a net approval rating of less than zero. The estimates for the revised model are as follows:

Adding the polarization correction to the basic model substantially improves its overall accuracy and explanatory power. All of the predictors have statistically significant effects including the new polarization term and the predictions for the four elections since 1996, including the two involving first-term incumbents, are much more accurate. In fact, the data displayed in table 2 show that the average out-of-sample forecasting error for all 16 postwar elections is only 1.1 percentage points, less than half of the average margin of error of the final preelection Gallup Poll during the same time. The correlation between the out-of-sample forecasts and the actual election results is an extraordinary .97, so the out-of-sample forecasts explain 94% of the variance in the election results. Finally, the out-of-sample forecasts correctly predict the winner of the popular vote in 15 of the 16 postwar elections.

Table 2

Accuracy of Out-of-Sample Forecasts of Postwar Presidential Elections

Note: Based on share of major party vote for incumbent party candidate.

Source: Data compiled by author

The estimates for the revised model indicate that in the current era of partisan polarization, the advantage enjoyed by a first-term incumbent is less than half of what it was earlier—about 2.5 percentage points instead of 5.2 percentage points. This is not only a statistically significant difference; it is also a substantively significant difference. In the case of the 2012 election, it means that President Obama is likely to have a much tougher fight to win a second term than a first-term incumbent with similar approval numbers and economic conditions in the era before polarization.

With the release of the federal government's first estimate of GDP growth during the second quarter of 2012, all of the predictors used in the revised model are now available although the final GDP estimate will not be known until late September. President Obama's net approval rating in the final Gallup Poll in June was +2 percentage points (48% approval vs. 46% disapproval). And Obama's advantage as a first-term incumbent in the current era of polarization is 2.5 percentage points. Finally, real GDP growth was estimated at 1.5% during the second quarter of 2012.

Based on these values, the revised model including the polarization adjustment predicts a one percentage point victory for Barack Obama, 50.5% to 49.5%. Barring any changes in the second quarter GDP estimate, this is the closest popular vote margin predicted by the model in the entire postwar era although it is only slightly smaller than the 1.2 point margin predicted for Jimmy Carter in 1976. Moreover, based on the 16 out-of-sample forecasts, about one third of incumbent party candidates have fallen at least one-half percentage point below the share of the vote predicted by the model. This suggests than Barack Obama has about a two-thirds chance of winning the popular vote this year.