Heavy Lifting - thoughts and web finds by an economist
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Saturday, April 08, 2006

Gasoline Prices, Iraq, or Both?

This is a plot of Pres. Bush's approval rating and the inverse of gas price index. Looks like a strong correlation:

Prof. Pollkatz's image here.


One of my current econometrics students is working on a similar hypothesis, trying to determine which is more important to presidential approval, accumulated U.S. deaths in Iraq or the price of gasoline. While the talking heads and the far left would have us believe it is the former, it is all too likely that it is really the latter.

(HT: PROFESSOR POLLKATZ)

[UPDATE: More analysis here and here and the latest stuff is here]

Comments:
wow..nicely done.

The large hump on the left (Oct 2001) shows that the president's index rose first and then was followed by the reduction in the gas index.

After April 2003, the gas index seems to precede the trend in the president's numbers.

Your observation is very interesting.

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I have always known that it was the price of gas, i.e. Julius Ceasars "pebble in the shoe" that the common man cares about. Well the next question is how they're going to blame Bush for the high price of gas? Another conspiracy theory about "evil corporations"? Maybe Bush will have the strategic oil reserves release a load of oil right before the midterm elections, that will send them into a tizzy. The truth is that there are market forces pushing up the price of gas. There is competition from China and India, and the fact that a lot of the greenies won't let us drill in ANWAR, and the Florida Gulf. Sure the Republicans are in power, but the lefties do have an effective veto power in the Congress, the real blame rests with the envirokooks. Remember the fight that Ted Stevens of Alaska got into over the ANWAR drilling controversey? There is also the middleastern question, not Iraq, but Iran. You are right, the approval ratings have nothing to do with Iraq, and there is no way the American public will trust the Democrats on issues of security, Iran is a double edged sword. They can unilaterally affect the price of oil, in addition they are a bunch of schizo's who want a nuke, another part of the blame rests with them. The enemy's flag is green.
 
Do you know what is the actual pearson's r for these two variables?

Fun graph!
 
I would think that there is a fairly strong correlation between fuel prices and feelings (ie, optimism/pessimism) on Iraq that would be difficult to disentangle.
 
Holy crap! THAT'S revealing!!
 
Another thought. could your chart possibly mean that the same thing that make gas prices rise make Bush's popularity fall.

In other words, rather than gas prices affecting popularity. Something else affects gas prices and Bush's popularity the same way.
 
This is disappointing, as there isn't much he can do about gas prices. 25 years with low infrastructural investment in refining capacity is a hard thing to fix in a few years, let alone a few months. Though Congress could reduce gas taxes and enviromental regs. and effect a noticable change. And if states would lower their gas taxes it would help too. Maybe Republican governors and state legislatures could look into that. The reduced income could be helpful in reducing wasteful spending and helping earmark reform. I think Jim DeMint is aiming for something along these lines right now, but they're going to have to do it soon to have any real effect.

I'm not holding my breath though. Getting Congressmen to recognize their fate being tied to the President means they need to help him is not likely to occur. No wonder their approval is lower than his.
 
That has been one of my gripes against pollsters like Zogby who believe the price of gas is an important question to ask in order to determine the presidents approval rating.
 
One flaw I see in interpreting this as cause/effect is, if people are reacting to gas prices, the poll results ought to trail the prices. (i.e., a drop in the polls ought to lag an increase in gas prices slightly.) They don't appear to be doing that -- in fact, in some cases the poll results are *leading*.
 
Correlation, of course, is not causation, but this certainly is suggestive -- and a logical connection can certainly be described. I've suspected this for a long time, but was too lazy to dig out the figures. I'm glad to see that someone is doing so.
 
Gasoline prices are almost certainly more important to President Bush's approval ratings, given the choice just between that and deaths in Iraq. As you allude to, it's only the talking heads on "news" programs who want us to believe deaths in Iraq are a major issue in the States.
Rational thinkers (comprising most of our population) understand the war in Iraq is a war about our national security against terrorism, and don't concur with the liberal naysayers.
Prices at the gasoline pump hit home every day, and make a much stronger adverse impression on us.
Incidentally, most rational thinkers here understand that liberal environmental policies are preventing us from tapping proven domestic reserves capable of replacing our imports completely.
Mike
Dallas, TX USA
 
That is fascinating. Scary, but fascinating.
 
I remember gas prices as low as $.89/Gal in the late 1990's, supposedly thanks to Venezuela’s continued oil output in spite of the low price. In retrospect, maybe the high polling and “approval numbers” that people gave Clinton were nothing but a reflection of or reaction to the low consumer prices of gasoline.
 
It sure looks to me like these two time series (oil prices and presidential approval) are cointegrated for this time period. I hope you are looking into this.
Dan Coggin
 
I heard about this from Rush Limbaugh's radio show. It does look highly corralated. Perhaps because the price of oils is ofetn driven by the level of uncertaintly about the future (some estimtes save $20 or more of the current cost is risk), the less popular a president the greater the preceived future risk.
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Unbefrickinglievable.

Someone get that to Kruggles the Klown at the NYT! He has need of pantscrapping material.
 
There's lots of reasons to hate Bush besides gasoline prices. His policies consolidate every bad idea to come down the Republcian pike in the last 100 years, some of which are at direct odds with each other. Needless to say that's not good for the nation or the world. For instance nobody voted for dismantling Social Security or for government meddling in end of life decisions in 2004. They voted for
winning the war in Iraq. If he somehow magically pacified that nation in the preceding 18 months he'd be able to lay the gas price blame elsewhere just as he blamed his recession on 9/11 and
Bill Clinton. Instead of finishing the two wars he has going he's threatening to start another one with Iran. Thus his popularity ratings are in the toilet where they belong.
 
Could it be cause and effect the other way round?

Perhaps gas prices are rising because GW Bush is increasingly unpopular?
 
"While the talking heads and the far left would have us believe it is the former, it is all too likely that it is really the latter."

Yes, those far left crazies who think the American people care more about the deaths of our soldiers in Iraq than they do about how much it costs to fill up their monster SUVS. Why do they hate America so?
 
Are you able to post the graph of approval vs. the inverse of deaths, so we can compare?
 
More likely gas prices are affected by the same things that affect Bush's popularity.

Basically you have an interesting graph that really doesn't prove anything.
 
I think that these gas prices are not really called for it should not be that high and then some people have to spend about $150.00 to $200.00 in gas and we don't know why
 
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