An economic model aimed at predicting presidential elections suggests that Gov. Mitt Romney has a narrowly better chance than President Barack Obama of carrying the race. Yale University economist Ray Fair has analyzed economic data from every presidential election since 1916. The model he developed has, after the fact, named the winners of all but two races — the 1960 election, when Richard Nixon lost to John Kennedy, and the 1992 election, when George H.W. Bush lost to Bill Clinton. With Friday’s gross domestic product report, the three economic variables that Mr. Fair has found are best at predicting elections are now in hand. They are: –The per capita growth rate of gross domestic product in the three quarters before the elections. (Voters seem to remember recent economic history more than they do over the span of the quarter). For the first three quarters of this year, GDP per capita grew at a 1.01% annual rate. –Inflation over the course of the entire presidential term, as measured by the GDP price index. The annual rate of inflation by this measure was 1.58%. –The number of quarters during the presidential term that GDP per capita growth exceeded 3.2%. There has been only one such “good news” quarter — the fourth quarter of last year, when GDP per capita grew 3.3%. Plug those figures into Mr. Fair’s model and it shows that President Obama will receive 49% of the two-party vote. The good news for the president is that there’s enough wiggle room in the model that he could come out on top — actual vote shares are within about 2.5 percentage points of what the model predicts. Moreover several polling models currently suggest the Mr. Obama will narrowly capture the popular vote.
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