The economic determinants of U.S. presidential approval: A survey

- We survey the extensive literature on US presidential popularity.
- Almost half the studies find that the economy has no impact on popularity ratings.
- We discuss several methodological issues and present own empirical results.
- Unemployment and inflation decrease government popularity.
- Results depend on the sample period and the assumption of a linear relationship.

Even after four decades of research it remains unclear, whether presidential popularity depends on the state of the economy. While about half of all studies for the United States find a significant effect of unemployment and inflation on presidential popularity, the others do not. Additional economic issues have rarely been studied. In this survey article we study the likely causes for the inconclusive findings. While various factors have an influence on the results, especially the choice of the sample period is of crucial importance. While in the very long run we find unemployment and inflation to have a robust effect on presidential approval, this holds not true for shorter sub-periods. This result might indicate that the popularity function is instable over time. However, the findings might also be taken as an indication that the most often employed linear estimation approach is inadequate. Further research on these issues is necessary.