Political Reactions to Macroeconomic Policy and prediction of Election

Abstract

The aims of this paper are that we inves-tigate the voters' reactions to important factors, macroeconomic policy perfomed by the LDP and his administration, and predictions of election published by mass media, and try to analyse these relationships.
First, we estimate the voters' judgements of performances of macroeconomic policies managed by the incumbent party. For the estimation, we investigate two hypothesis on which every voter perceives the macro trade off between price increase and unemployment, or not, and infer the structure of voters' political preference with respect to the economic policies, indirectly.
Second, we analyze the voter's behavior reacts predictions published by mass media. H. Simon investigated two effects of voter's reactions to prediction, ‘Bandwagon Effect’ and ‘Underdog Effect’. Through operating the voter's behavioral model, we can estimate the effects on the space spanned by actual supporting vote and the prediction.
Third, we argue that the prediction of vote should be accurate as possible, so that the prediction procedure should be constructed not only by cross section data obtained by own research section but also by time series data announced by the authorities.