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Partisan Bias, Economic Expectations, and Household Spending

Author

Listed:
  • Atif R. Mian

    (Princeton University)

  • Amir Sufi

    (University of Chicago)

  • Nasim Khoshkhou

    (Argus Information and Advisory Services)

Abstract

The well-documented rise in political polarization among the U.S. electorate over the past 20 years has been accompanied by a substantial increase in the effect of partisan bias on survey-based measures of economic expectations. Individuals have a more optimistic view on future economic conditions when they are more closely affiliated with the party that controls the White House, and this tendency has increased significantly over time. Individuals report a large shift in economic expectations based on partisan affiliation after the 2008 and 2016 elections, but administrative data on spending shows no effect of these shifts on actual household spending.

Suggested Citation

  • Atif R. Mian & Amir Sufi & Nasim Khoshkhou, 2018. "Partisan Bias, Economic Expectations, and Household Spending," Working Papers 2018-9, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2018-9
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    Citations

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    Cited by:

    1. Guirola, Luis, 2025. "Economic expectations under the shadow of party polarization: Evidence from 135 government changes," European Economic Review, Elsevier, vol. 171(C).
    2. Pandey, Vivek & Shen, Xingyu & Wu, Joanna Shuang, 2025. "Partisan regulatory actions: Evidence from the SEC," Journal of Accounting and Economics, Elsevier, vol. 80(1).
    3. Crombach, Lamar, 2026. "Electoral corruption cycles: Separating perceptions and experiences across households and experts," European Journal of Political Economy, Elsevier, vol. 92(C).
    4. Simon, Pedro, 2026. "Partisan differences among independents: Evidence from household economic expectations," Economics Letters, Elsevier, vol. 267(C).
    5. Claus, Edda & Nguyen, Viet Hoang, 2026. "Heart strings and purse strings: The impact of affect on consumer spending," European Economic Review, Elsevier, vol. 187(C).
    6. Meng, Yun & Pantzalis, Christos & Park, Jung Chul, 2023. "Why corporate political geography matters for stock returns," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 71-96.
    7. Yusuke Aoki & Joon Suk Park & Yuya Takada & Koji Takahashi, 2025. "Expecting job replacement by GenAI: effects on workers' economic outlook and behavior," BIS Working Papers 1269, Bank for International Settlements.
    8. Ben-Shahar, Danny & Gabriel, Stuart & Nayer, Dana, 2026. "Political belief, attitudes toward risk, and behavior on the road," Transportation Research Part A: Policy and Practice, Elsevier, vol. 203(C).
    9. Couture, Cody & Owen, Ann L., 2025. "Social media advertising and macroeconomic expectations: Evidence from Meta," Economics Letters, Elsevier, vol. 255(C).
    10. Capezzone, Tommaso & Conzo, Pierluigi & Sas, Willem & Vorobyev, Dmitriy & Zotti, Roberto, 2026. "Who Is to Blame (or Praise)? Information, Responsibility Attribution, and Service Quality in Multilevel Government," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202604, University of Turin.
    11. DiGiuseppe, Matthew & Garriga, Ana Carolina & Kern, Andreas, 2025. "Partisan Bias in Inflation Expectations," MPRA Paper 124391, University Library of Munich, Germany.
    12. Memon, Husna & Rubin, Amir, 2026. "Consumer sentiment inequality, relative performance of firms, and the market," Journal of Corporate Finance, Elsevier, vol. 99(C).
    13. Farhart, Christina E. & Struby, Ethan, 2026. "Inflation expectations and political polarization: Evidence from the cooperative election study," Journal of Macroeconomics, Elsevier, vol. 87(C).
    14. Michael D. Stuart & Jing Wang & Richard H. Willis, 2025. "CEO partisan bias and management earnings forecast bias," Review of Accounting Studies, Springer, vol. 30(2), pages 1463-1499, June.
    15. Guo, Junjie & Tang, Li & Xie, Shihan & Yin, Penghui, 2025. "Navigating fiscal fog: Household expectations in an uncertain fiscal environment," Journal of Economic Behavior & Organization, Elsevier, vol. 240(C).
    16. Jinfei Sheng & Zheng Sun & Wanyi Wang, 2024. "Partisan Return Gap: The Polarized Stock Market in the Time of a Pandemic," Management Science, INFORMS, vol. 70(8), pages 5091-5114, August.
    17. Carola Conces Binder & Rupal Kamdar & Jane M. Ryngaert, 2024. "Partisan Expectations and COVID-Era Inflation," NBER Chapters, in: Inflation in the COVID Era and Beyond, National Bureau of Economic Research, Inc.
    18. Ke, Da, 2024. "Left behind: Partisan identity, stock market participation, and wealth inequality," Journal of Banking & Finance, Elsevier, vol. 164(C).
    19. Michele Cascarano & Laura Sigalotti & Francesco Stradi, 2025. "EU views and household investments: evidence from the Brexit referendum," Temi di discussione (Economic working papers) 1504, Bank of Italy, Economic Research and International Relations Area.
    20. Çekin, Semih Emre & Polattimur, Hamza, 2025. "Televised inflation: Measuring TV news coverage and its effect on household expectations," ZEW Discussion Papers 25-051, ZEW - Leibniz Centre for European Economic Research.
    21. John M. Barrios & Yael Hochberg, 2020. "Risk Perception Through the Lens of Politics in the Time of the COVID-19 Pandemic," NBER Working Papers 27008, National Bureau of Economic Research, Inc.
    22. Jonas Dovern & Klaus Wohlrabe, 2025. "The Causal Effects of Trump's Reelection on Business Expectations of German Firms," CESifo Working Paper Series 12266, CESifo.
    23. Hector H. Sandoval & Anita N. Walsh, 2024. "Sentiments and spending intentions: Evidence from Florida," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1046-1073, July.
    24. Gockel, Christine & Strohsal, Till, 2026. "Anchoring inflation expectations: A teaching treatment and its persistence through the 2025 German federal election," Discussion Papers 2026/13, Free University Berlin, School of Business & Economics.

    More about this item

    Keywords

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    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D19 - Microeconomics - - Household Behavior - - - Other
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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