Economic Perceptions and Electoral Choices: A Design-Based Approach

Do economic perceptions affect voters’ electoral choices? There is ample evidence showing a correlation between how people perceive the current state of the economy and electoral decisions. However, there are reasons to believe that political preferences can also determine how voters evaluate economic conditions, which will reverse the causality arrow. The strategies previously implemented to address this problem have been based on the use of structural equations and instrumental variables, but they require very strong parametric or identification assumptions. In this paper, I follow a design-based approach by emphasizing the study design rather than statistical modeling. In contrast to previous studies that used the same panel data in Brazil, I find evidence that supports egotropic, rather than sociotropic, voting. This finding shows that traditional research designs may be overstating the magnitude of sociotropic economic voting.