Party Loyalty as Habit Formation

In most democracies, at least two out of any three individuals vote for the same party in sequential elections. Here I show that stands on the issues, candidates' attributes and individuals' demographics do not account for all of the persistence over time in voting decisions. I present a new theory that suggests that the excess persistence in voting decisions is due to habit formation, which means that utility is a function of previous voting decisions. The theory is tested using panel data on the presidential elections in the U.S. in 1972 and 1976. Diagnostic tests support the habit hypothesis and its implications and reject an alternative hypothesis presented by previous voting theories. Furthermore, the structural model is used to estimate the effect of habit, while allowing unobserved differences among respondents. The structural habit parameter implies that the effect of previous votes on current decision is quite strong. For example, an individual whose voting probability for the democratic party is 50 percent if she voted for its candidate in the previous elections, would have a voting probability of only 28.5 percent if her previous vote was for the Republican candidate instead. These results do not change when the model is extended to include the participation decision.