Predicting the Outcome of Tomorrow's Midterm Election

The first academic paper I ever published was an empirical analysis of the “midterm gap” in American politics.? (I couldn’t find an ungated version, but it’s not really worth reading anyway!)

In almost every midterm election in the 20th century, the party of the president has lost seats in the House of Representatives.? I wrote the paper as an undergraduate for a class taught by one of my favorite professors, Alberto Alesina.? He liked the paper and suggested I try to publish it.? I waited a few years to try while I dabbled in management consulting, but when I decided to go back to get a Ph.D., I dug out the paper, revised it and sent it off to an academic journal.

The paper ended up having a very typical life for an academic paper.? It got rejected from the first journal I sent it to.? Then it got rejected from a second journal.? Finally, I got a letter back from the editor at a third journal that was so cryptic I wasn’t sure whether the paper had been accepted or rejected.? I showed the letter to my MIT advisor Jim Poterba, and he gave me some sound advice: when in doubt, act like the paper has been accepted.? So I revised it and sent it back, and indeed it was accepted at long last.? That was in 1994.? In the last 16 years, it has managed to collect a whopping four citations according to Google Scholar. ?That’s probably about the median number of cites for an economics paper.

With all the buzz about this year’s midterm election, I pulled that paper out to have a look at what it predicts this year.? I found that a handful of (obvious) factors were important predictors of how many seats the party of the sitting president would lose.? The decline tends to be worse when the presidency switched parties two years earlier (i.e., it looks like the incumbent president’s party gets punished in both presidential election years and at the midterm, so the congressional vote was abnormally high in 2008 for the Democrats).? It helps the president’s party if GDP is growing quickly, if the president has a high approval rating, and if the president’s party has a lot of incumbent congress members.

When I crunch through the numbers, the prediction of the model is that the Democrats will end up with 199 seats, or a loss of 56 seats.? I would put essentially zero faith in this estimate on its own, but I find it interesting that the prediction it yields matches almost perfectly with the market prediction at Intrade.com.? As I write this, the market thinks there is a 47 percent chance that the Democrats will lose 60 seats or more.? Interestingly, back in August the market only put a 15 percent chance on a loss that big.? If you had believed my model (which would have made the same prediction in August), you could have made some money betting against the Democrats at that time.

The model did come through with flying colors the only other time I asked it to make a prediction.? That was back in 1994.? My paper was published in March 1994.? In the original conclusion to the paper, I estimated that in November of that year the GOP would take control of the House for the first time in decades.? My advisor Jim Poterba, when he read that prediction, told me I had to take it out of the paper. The first rule of paper writing, he told me, is to never make predictions about the future.? Also, he said, that prediction is just plain dumb.? Everyone knows that will never happen.? So he made me take the prediction out of the paper, and he told me he would buy me a pizza if I was right.

Even up to the day of the election, my prediction looked crazy.? I was at a political economy seminar at Harvard on election day, and when Poterba announced to the assembled crowd that I predicted the Democrats would lose the House, they guffawed uproariously.? Shockingly, the Democrats were routed, just as the model predicted.

Oh how I wished I had left that prediction in there.

If I had, I might have gotten five cites.? Or maybe even six.

Leave A Comment

Comments are moderated and generally will be posted if they are on-topic and not abusive.

 

COMMENTS: 18

View All Comments »
  1. Drill-Baby-Drill Drill Team says:

    If we lived in Iran, Zambia, Russia, North Korea, Egypt, Cuba, or Afganistan, predicting the election outcome would be a no-brainer.

    The election is stolen by the incumbents before the ballots even go out. Some particularly stong candidtates even finish with 99 percent of the vote–some even a 110%!!!

    Democracies are uncertain, but if our elections are not stolen, it is not for a lack of trying. Example: Florida Presidential Ballot for 2000 which produced W.

    My Magic Eight Ball Makes These Predictions:

    Democrats gain seats in Senate and Keep their Majority.
    Democrats lose seats in House, but Keep their Majority.
    Pelosi Leadership is unseated by Deomcratic Coup.
    Republicans gain several Governorships.
    Jobs and Foreclosures are the Predominant Issues on Voter’s Minds.
    Sarah Palin Spins a paltry result as a Mandate for her Presidential Run in 2012. And distances herself from the Witch faction.
    Several contested elections too close to call will persist until the weekend.
    The Witch will lose along with the Rent Too Damn High Guy, but they will get reality show promotions on FOX.
    Planes will have trouble landing in LAX because of new Marijuana Smog.
    And 7-11 Stores set to have a record year as Hungry Stoner Zoombies seek Munchies and assorted salty snacks..

    Thumb up 0 Thumb down 0
  2. I wonder says:

    Did you collect on the promised pizza?

    Thumb up 0 Thumb down 0
  3. A bank employee in NYC says:

    I am sure GOP will lose again mostly because they just failed to realize that vast, vast majority of Americans are working poor underclass live paycheck to paycheck. Look just look here in NYC, they are millions, yes millions people in their 30′s 40′s and 50′s live alone and they never accummlated enough money to have a family, to buy a house/condo, to have children. Yet most of them think they are “middle class”
    The massive self-deception in our society has reached unbearable level.
    I work for a big national bank, 68% of our bank customers with NYC zip code, the average saving and/or check account balance is $4335.00. 93% of our banks personal account balance never Over $7,300.
    I sincere hope this election would not trigger massive riots and looting in major urban areas.

    Thumb up 0 Thumb down 0
  4. clydemcphat says:

    Being a registered Democrat, I always HATE it when someone thinks the election in 2000 was stolen because of what happened in Florida. If Al had only won his own state, we wouldn’t have cared a lick what happened in Florida. So, he has no one to blame but himself for that loss.

    Thumb up 0 Thumb down 0
  5. 8th Man says:

    Thank you beforehand tea partyers and conservative Republicans for taking over congress… now it’s time to end socialism in American by ending Medicare and Social Security… two programs that virtually no one in American needs nor wants. Also please bring more grid-lock to the congressional schedule as this will ensure that no more money will be spent needlessly. We don’t need to spend any more as the bail-outs and war spending is all that is needed per the constitution.

    Thnak you and God bless you all….

    Thumb up 0 Thumb down 1
  6. Fred says:

    So, did you get your pizza?

    Thumb up 0 Thumb down 0
  7. James Walker says:

    I’m a republican but even if I weren’t I’d predict a democrat loss at least in the house. A lot of the house members were elected in conservative districts because of the boost in voter turnout. The turnout by democrats that will now will be lower that alone is a lot of seats.

    Thumb up 0 Thumb down 0
  8. Frederick Michael says:

    Steven,

    You left off the ending! What did Poterba do after you were proved right?

    Thumb up 0 Thumb down 0