Asymmetric Retrospective Voting: A Theoretical Model and Empirical Evidence of Negativity Effects in Voters' Response to the Economy

Abstract

<p>Prospect theory tells us that humans pay more attention to losses than to comparable gains. My dissertation seeks to apply this insight to the field of retrospective voting and in particular economic voting. </p> <p>First, I develop a formal model of asymmetric retrospective voting which allows for incorporating loss aversion. Then, the empirical implications of this theoretical model are tested using a variety of methodological approaches. First, the model's predictions about human behavior are tested directly in a laboratory experiment using a simplified version of the asymmetric retrospective voting model. In a second step, the analytical focus is widened, turning from the individual to the aggregate level: Using monthly time-series data, the asymmetric retrospective voting model is tested using the reaction of aggregate vote intentions to changes in economic conditions and evaluations. In a final step, using the broadest lens, the implications of the model with respect to the "cost of ruling", i.e. the empirical phenomenon of declining vote shares for incumbent governments, are tested using a large cross-national sample of elections.</p>