Undercover Economist

Economists Brian Knight and Nathan Schiff have a new research paper out (gated, sadly):

This paper provides an investigation of the role of momentum and social learning in sequential voting systems. In the econometric model, voters are uncertain over candidate quality, and voters in late states attempt to infer the information held by those in early states from voting returns. Candidates experience momentum effects when their performance in early states exceeds expectations. The empirical application focuses on the responses of daily polling data to the release of voting returns in the 2004 presidential primary. We find that Kerry benefited from surprising wins in early states and took votes away from Dean, who held a strong lead prior to the beginning of the primary season. The voting weights implied by the estimated model demonstrate that early voters have up to 20 times the influence of late voters in the selection of candidates, demonstrating a significant departure from the ideal of "one person, one vote." We then address several alternative, non-learning explanations for our results. Finally, we run simulations under different electoral structures and find that a simultaneous election would have been more competitive due to the absence of herding and that alternative sequential structures would have yielded different outcomes.

In other words, the paper assumes that later voters rely on earlier voters to investigate candidates thoroughly and think hard about the issues. That is not entirely unreasonable: voters in Iowa and New Hampshire are getting a lot of direct exposure to the candidates. But it is interesting – if depressingly unsurprising – that this means the earlier votes are 20 times as influential.

Isn’t it irrational for late voters to delegate the decision making to Iowa and New Hampshire? On an individual level, no. My vote is very unlikely to make a difference, so while I may vote because I want to have some skin in the game, or because I feel it’s my duty, I am hardly likely to spend too much time consulting the manifestos. Let Iowans do the hard work… (More on this in The Logic of Life. For an even more pessimistic view of voter rationality, see Bryan Caplan’s Myth of the Rational Voter.)

Here is a piece I wrote about information cascades in popular accounts of academic research – and how they caught me out.