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September 5, 2008

Economic Indicators as Proxy for Election Polls?

One of the first things you learn in an economics class is that it’s all about the distribution of scarce resources.

On the first day of class, I always ask students to think about a scenario in which the owners of the Chicago Cubs gave tickets away instead of selling them (for $45 to $100+)? How would those tickets be distributed? Would this be more fair? For example, if the Cubs announced a “Give-Away-Day” in the middle of a workweek, would that be fair to those with school-age children, people who work during the day or to those who don’t live in the area? In addition, what would prevent a ticket re-seller from hiring hundreds of people to stand in line, so that s/he could reap the profits on re-sale?

You get the point. There is no perfect way to distribute scarce resources. Economics teaches about the role of competition and how market mechanisms work to efficiently distribute resources.

So, what does this have to do with the upcoming presidential election? Well, think of government as a major player in the distribution of scarce resources, especially as it relates to public goods. The two candidates have different ideas about how the government should distribute scarce resources and voters across the country are likely to cast their ballots based on the degree to which the ideas appeal to them.

From www.Economy.com (Dismal Scientist), the map below illustrates the different economic situations of each state. Looking at the map, it is interesting to think about how the citizens of each state may take their economic situation into account as they evaluate the candidates’ proposed distribution of resources. What do you think – should we follow-up this posting after November with a comparison? Look up specific stats by zip-code or metro region at Dismal Scientist’s www.economy.com/dismal/pro/data/geo_profiles_new.asp

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By: Cindy

Posted by Cindy at September 5, 2008 11:31 PM

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