Research Paper QM&ET Working Papers 21-02
Identifying the economic determinants of individual voting behaviour in UK general elections
We explore the economic determinants of individual voting behaviour in five UK electoral cycles during 1992-2014. Using the Understanding Society and the British Household Panel Surveys, we investigate the importance of political sentiments and subjective economic evaluations disentangling persistence of party support and unobserved heterogeneity effects. We estimate joint dynamic tripartite models of party support and egocentric perceptions of current and prospective finances, permitting longitudinal simultaneous determination of perceptions of personal finances and political preferences. The results validate the economic voting hypothesis in cycles adjacent to economic downturns: support for the governing political party is positively related to individual perceptions of own financial wellbeing. Failing to account for simultaneity and not accounting for dynamics and initial political party support inflate the impact of personal financial evaluations.