Who Listens to a Stock Index?

Sammanfattning: Previous findings on the subject of Class Biased Economic Voting (CBEV) suggests that voters who are not among the wealthiest elite respond positively, in terms of probability of voting for the incumbent party or president, to income growth among the wealthiest 5% of households, and more so than to mean income growth. The aim of this paper is to explore if this type of bias voting is due to voters paying attention to macroeconomic variables that are correlated with economic fortunes of the wealthiest elites. It sets out to answer two questions: 1. Does stock index performance during election year effect CBEV? 2. Does stock index performance increase the probability of voting for the incumbent party or president? The study employs an individual level cross-sectional probit model using two measurements of income-growth alongside figures of stock index performance. Results indicate that stock index has an impact on probability of voting for the incumbent party/ president in France and Sweden but not in the United Kingdom (U.K.) Whether or not the stock index causes CBEV is difficult to infer, mainly due to the U.K’s responses to the stock market are statistically insignificant, as well insignificant results from the French electorate to income-growth.