Ray Fair of Yale University has one of the most respected election forecasting models. He just updated it with the new GDP data:
This is the last vote prediction before the election. Given the NIPA third-quarter data that were released today, the value of G is 1.03, the value of P is 1.57, and the value of Z is still 1. The predicted two-party vote share for Obama is 49.0 per cent (VP), and the predicted two-party vote share in the House for the Democrats is 46.0 per cent (VC). The presidential election is thus predicted to be very close regarding vote share, as it has been since October of last year. Obama has lost 1 percentage points of vote share between October 30, 2011, and now. The growth rate in the first three quarters of this year (G) turned out to be smaller than was predicted last October, as also did the inflation rate variable (P). The smaller G lowers the predicted vote share, and the smaller P raises it. On net, the predicted vote share fell 1 percentage points.
Here is the history of his forecast model of the past two years:
Obviously, two points is pretty close, but it does show a Romney win, at least in the popular vote.
UPDATE: The Fair model looks at the following criteria:
– growth rate of real per capita GDP in the first 3 quarters of 2012 (annual rate) (G);
– growth rate of the GDP deflator in the first 15 quarters of the Obama administration, 2009:1-2012:3 (annual rate) (P)
– number of quarters in the first 15 quarters of the Obama administration in which the growth rate of real per capita GDP is greater than 3.2 per cent at an annual rate (Z)
Also, Fair does add this caveat that the standard error of the vote-share equation is at least 2.5 percentage points. So it’s close!
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