November 01, 2015

Impact of Inflation on Electoral Outcomes in India.

The established wisdom is that inflation and prices play a significant role in Indian voter behaviour. That the average voter will be hurt by rising prices and demonstrate her disappointment at the polling booth is a well accepted narrative among political scientists, economists, observers, commentators and the political class themselves. This seems like a reasonable expectation, borne out through various voter surveys, too. We test this hypothesis by using actual electoral data and not surveys. We analysed whether voters expressed anger against their ruling party during times of high inflation and vice versa. Our analysis across 38 elections (3 Lok Sabha and 35 State Assembly elections) for the period 2000-2014 comprising of roughly 2.5 billion voter choices illustrates that it is not possible to draw a direct correlation between inflation and voter behavior. This is merely a hypothesis test and not a model to explain electoral outcomes.

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