IDEAS home Printed from https://ideas.repec.org/a/aea/aerins/v6y2024i1p73-88.html
   My bibliography  Save this article

Real Effects of Markets on Politics: Evidence from US Presidential Elections

Author

Listed:
  • Alan D. Crane
  • Andrew Koch
  • Leming Lin

Abstract

Despite the economic importance of the US stock market, there is strikingly little evidence of its impact on elections. Using county-level variation in stock market participation, we document the impact of market returns on election outcomes. High-participation counties are more likely to vote for the incumbent party when the market has performed well relative to low-participation counties. Our findings provide evidence of a novel channel through which stock market fluctuations could be transmitted into the real economy.

Suggested Citation

  • Alan D. Crane & Andrew Koch & Leming Lin, 2024. "Real Effects of Markets on Politics: Evidence from US Presidential Elections," American Economic Review: Insights, American Economic Association, vol. 6(1), pages 73-88, March.
    • Handle: RePEc:aea:aerins:v:6:y:2024:i:1:p:73-88
    DOI: 10.1257/aeri.20220240
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/aeri.20220240
    Download Restriction: no
    File URL: https://doi.org/10.3886/E183163V2
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aeri.20220240.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/aeri.20220240.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/aeri.20220240?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aerins:v:6:y:2024:i:1:p:73-88. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.