Anderson Economic Group Work

Award-Winning Economists Issue “Pocketbook” Prediction for 2012 Election

Economy likely to weigh-down incumbent’s chances

Chicago, Illinois, February 13, 2012 –Economists Anderson and Geckil released today a detailed look at “pocketbook” predictions of the 2012 presidential elections, using their award-winning, election-predicting pocketbook model.
“Pocketbook” issues describe the impression a voter has when considering their family budget and the national economy. The “pocketbook” model historically explains 21 out of the last 24 popular vote outcomes in U.S. presidential elections. The Anderson and Geckil model considers state data from 1980-2008 in addition to national data dating back to 1916.
The pocketbook model considers five categories of economic and institutional variables:
  1. Income Growth—increases in income are a pure “pocketbook” indicator; more income typically means more votes.
  2. Unemployment—growing unemployment unnerves voters; fewer jobs typically means fewer votes.
  3. Inflation—higher inflation (or deflation) affects voters negatively.
  4. War—voters rally around the commander in-chief in a full-scale war; they have a different view of limited wars.
  5. Third-party—these candidates often affect the election but rarely win major states.
The model also weighs more heavily the factors in the last year of each presidential term. The model excludes sentiment variables, such as polling data, partisan identification, and campaign expenditures.
The 2012 Pocketbook Scorecard, based on Anderson and Geckil’s five indicators, shows the following:
“The poor economy, especially the unemployment rate, suggests a very tough election for the incumbent President,” said Patrick L. Anderson. “Voters historically have punished incumbents when the jobless rate was over 6%. However, voters also tend to reward economic improvements in election years, so the results over the next 12 months will be critical.”
“The pocketbook model is an excellent indicator of election results, regardless of personalities and campaign expenditures,” said Ilhan K. Geckil. “Of course, as with every other econometric model, this one excludes a number of variables that voters can, and should, consider in addition to economic conditions.”
Anderson and Geckil intend to update the model in the spring and summer of 2012 as actual data for 2012 become available. These updates will be also available at
This model has been presented at the Hauenstein Center for Presidential Studies, first in 2004 and again on February 7, 2012. The authors also describe the model in the article Pocketbook Predictions of Presidential Elections (2004), which was published in the journal of Business Economics. The article earned the Edward A. Mennis award.
About Anderson Economic Group
Anderson Economic Group, LLC specializes in business valuation, public policy, and industry analysis and has offices in Chicago, Illinois and East Lansing, Michigan. Patrick Anderson, the firm’s CEO, is one of the nation’s foremost experts on how private businesses and the economy affect elections. He has written over 100 published works including “Pocketbook Issues and the Presidency” (2004) and “The Value of Private Businesses in the United States” (2009) both of which were awarded for outstanding writing in business economics by the National Association of Business Economics.
CONTACT:  Tyler Marie Theile, Anderson Economic Group, LLC