We have previously dismissed suggestions that market performance rises and falls in response to either candidates polling numbers. My conclusion was that the same underlying factors were impacting both the election race and the market. This was due to the all too common analyst practice of confusing “Cause & Effect”
Now we see a diffferent take which may actually have some resonance: The variation of this theme is comparing the Incumbent’s polled approval ratings with the price consumers’ pay for Gasoline. (via Professor Pollkatz)
click for larger chart
Graphic courtesy Prof PollKatz
There seems to be a fairly high correlation between the two, with perhaps a short lag. In these issues, the question is always: “What is the correlation, and is there a causative factor?”
In the rpesent case, the expectation of an incumbent getting blamed for high energy prices passes the sniff test.
Incidentally, the good Prof has a rather elegant solution to the issue of bad or biased polling: He maintains a “Pool of polls,” with every poll result simultaneously represented. It very cleverly solves a host of problems.
Lastly, for a host of polling details, I put together a full list of Presidential Polling Data Resources.
Gasoline prices, in relation to the cost of oil, were definitely less in the three months prior to George Bush’s re-election than they have been in the seven months following. See my post at: JonnymoOps.Blogspot.Com/2005/06/did-oilers-aid-bushs-reelection.html