In this chapter, we develop our argument that previous investigations into economic voting have been hobbled by model specification problems. We believe that the main problem in previous work has been a failure to focus on political parties as actors that compete for votes. This failure means that previous research has been unable to take account of the extent of party competition (which can vary from election to election). We argue that this failure to take account of party competition leads to models that are intrinsically mis-specified and that this is one of the root causes for the unstable and sometimes incoherent findings in the literature.

In what follows, we diagnose the deficiencies we see as endemic in existing studies of economic voting (many of these deficiencies apply to other studies of electoral behavior as well) and set out our ideas about what a viable approach should look like in general terms. This will set the scene for Chapter 2, in which we present our own approach to the study of economic voting and describe the ways in which it mitigates or eliminates the deficiencies of past studies.

Conceiving the Dependent Variable

Studies of economic voting have been conducted at the aggregate level, treating the country or election as the unit of analysis, and at the individual level, treating the survey respondent as the unit of analysis.