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FORECASTING THE 2008 PRESIDENTIAL ELECTION WITH THEFISCAL MODEL: THE CHALLENGE MET

Published online by Cambridge University Press:  08 January 2009

Alfred G. Cuzán and
Charles M. Bundrick
Alfred G. Cuzán
Affiliation:
University of West Florida
Charles M. Bundrick
Affiliation:
University of West Florida
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Extract

The October 2008 issue of PS published a symposiumof presidential and congressional forecasts made in the summerleading up to the election. This article is an assessment of theaccuracy of their models.

The presidential election forecast made with the Fiscal Model threemonths before Election Day put the incumbents' share of thetwo-party vote (VOTE2) at 48% (Cuzán and Bundrick 2008). As of the time ofthis writing, it appears the incumbent-party ticket of John McCainand Sarah Palin took a little less than that (around 46.5%). At1.5%, the error is less than 2.3%, which is Campbell's (2008, 680) “benchmark” for a“quite accurate” forecast. This is the second time in a row that theFiscal Model ranks among the best performers (Campbell 2005,23).

Information

Type
Forecasting Recap
Information
PS: Political Science & Politics , Volume 42 , Issue 1 , January 2009, pp. 23
Copyright
Copyright © American Political Science Association 2009

The presidential election forecast made with the Fiscal Model three months before Election Day put the incumbents' share of the two-party vote (VOTE2) at 48% (Cuzán and Bundrick Reference Cuzán and Bundrick2008). As of the time of this writing, it appears the incumbent-party ticket of John McCain and Sarah Palin took a little less than that (around 46.5%). At 1.5%, the error is less than 2.3%, which is Campbell's (Reference Campbell2008, 680) “benchmark” for a “quite accurate” forecast. This is the second time in a row that the Fiscal Model ranks among the best performers (Campbell Reference Campbell2005, 23).

Five predictors of VOTE2 make up the Fiscal Model: the PARTY of the incumbents (Republicans do better than Democrats); DURATION, an index of their time in the White House (borrowed from Fair Reference Fair2006), which reduces VOTE2 with every additional term beyond the first; GROWTH in per capita gross domestic product in the third quarter of the election year and ALLNEWS, the number of quarters during which GROWTH exceeds 3.2%, both variables (also borrowed from Fair Reference Fair2006) enhancing the in-party's prospects at the polls; and changes in the ratio of federal outlays to GDP, measured by a binary variable, FISCAL or FPRIME. Generally, incumbents that restrain budget expansion retain control of the White House and those who do not are defeated in their bid for reelection. Almost always, FISCAL and FPRIME agree in their rating of fiscal policy and hence in their forecasts. As explained in the October issue (Cuzán and Bundrick Reference Cuzán and Bundrick2008), on account of the unprecedented fiscal policy of George W. Bush's presidency, this year these variables did not agree: FISCAL forecast incumbent party reelection and FPRIME forecast defeat. We had to decide which one better fit the case. For the reasons we gave in the October issue, we concluded that FPRIME did. The election outcome suggests that our choice of spending measure was correct. The challenge to the Fiscal Model posed by the 2008 election was met.

Incidentally, the original forecast relied on Ray Fair's July 31 projections of GROWTH and ALLNEWS. On October 31, Fair updated both variables with the latest BEA data. ALLNEWS did not change but GROWTH dropped from 1% to 0.22%. Entering the revised value into the Fiscal Model with FPRIME brings the forecast even closer to the actual result, at 47.6% for the incumbents, only 1.1% off.

References

Campbell, James E. 2008. “Editor's Introduction: Forecasting the 2008 National Elections.” PS: Political Science and Politics 41 (October): 679–81.Google Scholar
Campbell, James E. 2005. “Introduction—Assessments of the 2004 Presidential Vote Forecasts.” PS: Political Science and Politics 38 (January): 23.Google Scholar
Cuzán, Alfred G., and Bundrick, Charles M.. 2008. “Forecasting the 2008 Presidential Election: A Challenge for the Fiscal Model.” PS: Political Science and Politics 41 (October): 717–22.Google Scholar
Fair, Ray. 2006. “The Effect of Economic Events on Votes for President: 2004 Update.” http://fairmodel.econ.yale.edu/RAYFAIR/PDF/2006CHTM.HTM.Google Scholar