How Is the Economy Doing? Politics Will Probably Decide Your Answer

Suppose it is dinnertime, and the phone rings. It is a polite survey taker with a simple question for you: How is the economy doing?

You might answer the question based upon the news stories you’ve seen recently about the latest unemployment rate, or perhaps based on anecdotal observations, such as whether your long-jobless cousin has had any luck finding work.

But a wide range of academic work suggests a different factor that is likely to shape your answer: whether the current occupant of the White House is of your preferred political party.

.. And it could even have implications for the economy itself if, for example, conservative-leaning business executives freeze hiring or investment when the president doesn’t share their politics.

.. When survey respondents were offered a small cash reward — a dollar or two — for producing a correct answer about the unemployment rate and other economic conditions, they were more likely to be accurate and less likely to produce an answer that fit their partisan biases.

In other words, when money was added to the equation, questions about the economy became less like asking people which football team they thought was best, and more like asking them to place a wager. Even a little bit of cash gets people to think harder about the situation and answer more objectively.

.. The paper by Mr. Bullock, Alan S. Gerber, Seth J. Hill and Gregory A. Huber found that offering a $1 payment for a correct response and a 33-cent payment for an answer of “Don’t know” eliminated the entire partisan gap between Democrats and Republicans on questions about the economy.