The real economy and the perceived economy in popularity functions: how much do voters need to know? A study of British data, 1974-97

Recent evidence regarding voters' (low) levels of economic knowledge poses a worrying problem for popularity functions which seek to model the effects of the macro-economy on patterns of party support. If voters an largely ig norant of economic facts, how can economic conditions apparently affect par ties' electoral fortunes? The paper argues that although voters may have on ly a hazy factual knowledge about the state of the economy, their overall s ense of macro-economic improvement and decline is remarkably acute and that it is this general sense of improvement or decline that matters electorall y. Consistent with recent arguments about 'reasoned choice', voters do not need to know precise 'economic facts' in order to make reasonably well-info rmed judgements about the state of the economy-judgements which in rum exer t a powerful influence on their party political preferences. This conclusio n is strongly supported by aggregate-level evidence relating to British vot ers over the period 1974-97. (C) 2000 Elsevier Science Ltd. All rights rese rved.