Yale University Economic Model Gives Election to Romney

Based on his economic election model, Yale University economist Ray Fair predicts that GOP nominee Mitt Romney will pull out a sparse victory in November.

Fair’s model successfully predicts the winners of every election but two since 1916. The two, the 1960 election of John Kennedy and the 1992 election of Bill Clinton, are the only ones his economics-based electoral prediction model gets wrong.

Fair uses several economic indicators in his model to determine winners. Those factors include the per capita growth rate of the gross domestic product, inflation, and the number of quarters that the GDP grew more than 3.2% during the incumbent’s term.

But even Fair’s model predicts a race that is within his margin of error. Obama could still pull this out despite an economy that argues against his re-election.

As The Wall Street Journal’s Justin Lahart postulates, this could be because voters don’t exactly see the election in pure economic terms and with this particular election being so close, that small differentiation between logical economic indicators and the emotional ties some voters have to their choice can easily upset Fair’s economic prediction model this time out.

Still, Lahart also notes that Friday’s report that the economy grew at but a tiny 2% rate, the three most unfavorable statistics for Obama are “now in hand.” These factors plugged into Fair’s model would argue in favor of Mitt Romney winning on Election Day.

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Posted by on October 31, 2012.
Filed under 2012 Presidential Race, Economics, Elections.
Warner Todd Huston is a Chicago-based freelance writer, has been writing opinion editorials and social criticism since early 2001 and is featured on many websites such as Andrew Breitbart's BigGovernment.com and BigJournalism.com, RightWingNews.com, CanadaFreePress.com, RightPundits.com, StoptheACLU.com, Human Events Magazine, among many, many others. Additionally, he has been a frequent guest on talk-radio programs to discuss his opinion editorials and current events.He has also written for several history magazines and appears in the new book "Americans on Politics, Policy and Pop Culture" which can be purchased on amazon.com. He is also the owner and operator of PubliusForum.com. Feel free to contact him with any comments or questions, EMAIL Warner Todd Huston: igcolonel .at. hotmail.com"The only end of writing is to enable the reader better to enjoy life, or better to endure it." --Samuel Johnson

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  • jim_m

    Yeah, well we already know that everyone at Yale is a racist. In fact, because the Yale model does not factor race into the equation is proof that the model is racially biased. Ray Fair is a white man at a white university using evil capitalist tools of economics. This reeks of racial prejudice!

    /leftist thinking

  • ackwired

    Has anyone seen an explanation as to why Intrade is running about 65 to 35 for Obama. I see a lot about how close this election is going to be. But I have not seen anyone address this discrepancy.

    • http://opinion.ak4mc.us/ Scribe of Slog (McGehee)

      Supporting Obama has always been a money-losing proposition, and Intrade cuts out the middleman. <rimshot>

      I think a serious explantion would take into account that most people with priorities that make sense don’t consider betting on political outcomes a worthwhile use of scarce dollars.

    • retired.military

      Ackwired

      Serious answer here – I read somewhere that intrade is mainly foreigners betting on the election (read that as Europeans) and that they are looking at it from their perspective. I have no clue as to the validity of this statement just repeating what I heard with all disclaimers.

      On a side note, I heard from a friend (and again I have not checked) the Vegas oddsmakers are giving a lot better odds to Obama winning than Romney.

      Again. What I heard. Put as much or as little faith into that as you will.

      • ackwired

        Interesting…thanks for the input.

        • retired.military

          Did a bit of checking. Cant find Vegas odds.

          But here

          http://www.oddschecker.com/specials/politics-and-election/us-presidential-election/winner

          Obama is about 1/3 and Romney is about 9 /4 which I believe means

          Obama bet 1 get 3 and Romney bet 9 get 4 which would go against intrade and what my friend said.

          http://sports.ladbrokes.com/en-gb/politics/us-presidential-election/2012-us-presidential-race-e212304268

          has Obama 2/7 and Romney 5/2 which again appears to go against intrade and What my friend told me.

          Going further down the last site they have electoral college results and If I am reading it right it looks like the odds on Obama winning are a lot longer than the odds on Romney wining.

          Example Both are 4/1 on winning 270-289

          Bet 4 win 1.

          But the higher you go on either side it appears the odds are saying Romney will win.

          Example

          .Obama winning 290-309 is 9/4 Bet 9 win 4.

          Romney winning 290-309 10-1 Bet 10 win 1.

          I think I got those wrong but I am not sure. It may be reversed which would mean they favor Obama.

          Intrade gives Obama 68% chance to get reelected and Romney 32% chance to get elected.

          Folks please feel free to see if I am reading these sites wrong. I play poker and dont usually do sports betting etc.

          • ackwired

            I’m not familiar with these odds either. But at the first site I converted the quotes to “US” and it now shows Obama -350 and Romney 250 which means that $100 bet on Romney pays $250 and that you would need to bet $350 on Obama to win $100. Without doing any math, I think that is about the same as Intrade. It is interesting that the Electoral College are scewed as much as they are.

            Thank for all of your work on this.

          • retired.military

            Wish I could understand it more. LOL maybe I should have bet at one of those sites instead of you guys.

        • retired.military

          Did a bit of checking. Cant find Vegas odds.

          But here

          http://www.oddschecker.com/specials/politics-and-election/us-presidential-election/winner

          Obama is about 1/3 and Romney is about 9 /4 which I believe means

          Obama bet 1 get 3 and Romney bet 9 get 4 which would go against intrade and what my friend said.

          http://sports.ladbrokes.com/en-gb/politics/us-presidential-election/2012-us-presidential-race-e212304268

          has Obama 2/7 and Romney 5/2 which again appears to go against intrade and What my friend told me.

          Going further down the last site they have electoral college results and If I am reading it right it looks like the odds on Obama winning are a lot longer than the odds on Romney wining.

          Example Both are 4/1 on winning 270-289

          Bet 4 win 1.

          But the higher you go on either side it appears the odds are saying Romney will win.

          Example

          .Obama winning 290-309 is 9/4 Bet 9 win 4.

          Romney winning 290-309 10-1 Bet 10 win 1.

          I think I got those wrong but I am not sure. It may be reversed which would mean they favor Obama.

          Intrade gives Obama 68% chance to get reelected and Romney 32% chance to get elected.

          Folks please feel free to see if I am reading these sites wrong. I play poker and dont usually do sports betting etc.

  • 914

    I gave it to ABO 2 years ago.

  • Commander_Chico_Cognoscente

    Chico predicts a disputed result and civil war.

    • warnertoddhuston

      You mean Cheapo HOPES for such, don’t you?

      • Commander_Chico_Cognoscente

        No, because then I might not get paid my pension from the Navy Reserve when I’m eligible in a few years.

        A civil war after the 2000 election was part of the plot of Paul Auster’s novel Man in the Dark.

        http://en.wikipedia.org/wiki/Man_in_the_Dark_(novel)

      • Commander_Chico_Cognoscente

        No, because then I might not get paid my pension from the Navy Reserve when I’m eligible in a few years.

        A civil war after the 2000 election was part of the plot of Paul Auster’s novel Man in the Dark.

        http://en.wikipedia.org/wiki/Man_in_the_Dark_(novel)

    • warnertoddhuston

      You mean Cheapo HOPES for such, don’t you?

    • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

      That would be very un-healthy…

    • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

      That would be very un-healthy…

    • http://www.rustedsky.net JLawson

      There may be some who want a civil war – and I have no doubt there’s some who hope to profit from such either politically or monetarily.

      The rest of us likely aren’t going to play that game – unless forced.

    • herddog505

      I realize that democrats are sore losers, but I don’t think they’re THAT bad.

    • Jwb10001

      So Chico (by the way referring to yourself in the 3rd person is lame) do you foresee this in any event or only if one of the 2 candidates loses?

    • retired.military

      In the civil war you have the libs who want to hurl words and hire folks with guns vs the conservatives who have guns and generally know how to use them.

      Plus most of the military doesnt care for Obama. Your odds are not good chico.

  • Commander_Chico_Cognoscente

    Chico predicts a disputed result and civil war.