Partisan bias in inflation expectations

Bachmann, Oliver; Gründler, Klaus; Potrafke, Niklas; Seiberlich, Ruben

doi:10.1007/s11127-019-00741-0

Publication type:	Article in scientific journal
Type of review:	Peer review (publication)
Title:	Partisan bias in inflation expectations
Authors:	Bachmann, Oliver Gründler, Klaus Potrafke, Niklas Seiberlich, Ruben
et. al:	No
DOI:	10.1007/s11127-019-00741-0
Published in:	Public Choice
Volume(Issue):	186
Issue:	3-4
Page(s):	513
Pages to:	536
Issue Date:	2021
Publisher / Ed. Institution:	Springer
ISSN:	0048-5829 1573-7101
Language:	English
Subjects:	Inflation expectation; Partisan bias; Political ideology; Voters’ perception
Subject (DDC):	332: Financial economics
Abstract:	We examine partisan bias in inflation expectations. Our dataset includes inflation expectations of the New York Fed’s Survey of Consumer Expectations over the period June 2013 to June 2018. The results show that inflation expectations were 0.46% points higher in Republican-dominated than in Democratic-dominated US states when Barack Obama was US president. Compared to inflation expectations in Democratic-dominated states, inflation expectations in Republican-dominated states declined by 0.73% points when Donald Trump became president. We employ the Blinder–Oaxaca decomposition method to disentangle the extent to which political ideology and other individual characteristics predict inflation expectations: around 25% of the total difference between inflation expectations in Democratic-dominated versus Republican-dominated states is based on how partisans respond to changes in the White House’s occupant (partisan bias). The results also corroborate the belief that voters’ misperceptions of economic conditions decline when the president belongs to the party that voters support.
URI:	https://ideas.repec.org/p/ces/ceswps/_7904.html https://digitalcollection.zhaw.ch/handle/11475/18613
Fulltext version:	Published version
License (according to publishing contract):	Licence according to publishing contract
Departement:	School of Management and Law
Appears in collections:	Publikationen School of Management and Law

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Bachmann, O., Gründler, K., Potrafke, N., & Seiberlich, R. (2021). Partisan bias in inflation expectations. Public Choice, 186(3-4), 513–536. https://doi.org/10.1007/s11127-019-00741-0

Bachmann, O. et al. (2021) ‘Partisan bias in inflation expectations’, Public Choice, 186(3-4), pp. 513–536. Available at: https://doi.org/10.1007/s11127-019-00741-0.

O. Bachmann, K. Gründler, N. Potrafke, and R. Seiberlich, “Partisan bias in inflation expectations,” Public Choice, vol. 186, no. 3-4, pp. 513–536, 2021, doi: 10.1007/s11127-019-00741-0.

BACHMANN, Oliver, Klaus GRÜNDLER, Niklas POTRAFKE und Ruben SEIBERLICH, 2021. Partisan bias in inflation expectations. Public Choice [online]. 2021. Bd. 186, Nr. 3-4, S. 513–536. DOI 10.1007/s11127-019-00741-0. Verfügbar unter: https://ideas.repec.org/p/ces/ceswps/_7904.html

Bachmann, Oliver, Klaus Gründler, Niklas Potrafke, and Ruben Seiberlich. 2021. “Partisan Bias in Inflation Expectations.” Public Choice 186 (3-4): 513–36. https://doi.org/10.1007/s11127-019-00741-0.

Bachmann, Oliver, et al. “Partisan Bias in Inflation Expectations.” Public Choice, vol. 186, no. 3-4, 2021, pp. 513–36, https://doi.org/10.1007/s11127-019-00741-0.