Voting Like an Economist

Voting is a staple of the American psyche. The act of voting is a symbol for what America stands for; freedom and democracy. An important part of the democratic process is a healthy constituent of active voters. But how important is voting, really? From some economists’ perspectives, the act of voting is a waste of time for the simple reason that no single vote will decide an election.

This stems from the fact that the odds of the voter’s vote deciding an election are extremely extremely low. This fact is obvious at the level of presidential election, but surely a voter matters in smaller elections, like elections held for Congressional and state-legislative positions? The answer turns out to be no. Economists Casey Mulligan and Charles Hunter analyzed more than 56,000 examples of such elections since 1898 and found only 7 elections for state-legislature positions and only one Congressional election decided by one vote. In a vacuum, a single citizens vote is statistically extremely unlikely to affect the outcome of an election.

To compound on this, elections do not occur in a vacuum. There are other factors that further push the odds of a vote mattering towards zero. For presidential elections, the electoral college ensures that the vote of anyone not in a swing state is inconsequential. In all of the states that are firmly partisan, the vote of a single citizen of the state has very little chance of mattering, due to the winner-take-all policy of giving every single electoral vote to the winner of the state. In Washington state, for example, a liberal voter will add one more vote to the voice of the majority, while the vote of a conservative voter will not be able to make an impact on the states overall liberal leaning. In 2012, although Obama won Washington by 14.9%, he received every single electoral vote from Washington State. Even if the vote is close in a small area, the decision will never come down to one vote from a citizen. Instead, in a very close race the courts will take over the decision and determine the outcome, like in the 2000 presidential. In smaller elections, redistricting by congressmen into favorable districts can further marginalize voters.

So the probability that a vote will change the outcome of an election is close to zero. This becomes important when looking at the basic formula for determining whether or not an individual will vote:

PB + D > C

Where:

• P is the probability of the vote affecting the outcome

• B is the benefit that is perceived if the individual’s preferred candidate wins

• D is the social or personal gratification from voting

• C is the time, effort and cost of voting

The assumption is that the only time someone should vote is when the benefits outweigh the costs, so a potential voter should vote when this formula is satisfied. The interesting thing about this formula is that it given the assumption that P approaches zero, then the only reason that rational people who understand the probability of their vote affecting the outcome of an election only vote because of the gratification they receive from participating in the process rather than a desire to affect the election.

Another interesting way to look at voting through the eyes of an economist is to look at the assumptions made by modern democracy. The major assumption that is put in question is the idea that the more well-informed the voting constituency is, the better decisions the people will make for the country. An underlying belief implicit in this idea is that given a totally rational population, if the voters are perfectly informed, there would be agreement on a correct course of action. The problem with this assumption is that humans do not seem to be inherently rational.

In fact, we have an interesting relationship with facts when it comes to politics. In a paper by Alan Abramowitz and Kyle Saunders about the increased political polarization in America, the political scientists found that the more politically knowledgeable a voter, the more polarized his or her political view was. Instead of more informed voters agreeing on issues, they diverge further apart.

In the same vein, in a study done by researchers at the University of Michigan, when people with strong political views were shown information that refuted their beliefs, they rarely change their minds. Instead, they are actually more likely to be further set on their beliefs, instead of the questioning them. Information actually has the opposite effect than is rational.

In economics, the assumption is that all decisions are made rationally. Theoretically, there should be a perfect equilibrium level of policy that allows for the most benefit to a society. In this scenario, too much or too little government action would lead to deadweight loss to the society, and a perfectly rational and informed voter group would find this equilibrium amount of government, just like how a market will reach its equilibrium price and quantity.

The fact that humans act so irrationally in the face of more information in the instance of politics creates an interesting question as to the capability of the public to make good decisions. When markets have deadweight loss and are unable to perform at the equilibrium levels of production, the government can institute policies to correct the welfare loss. But what can possibly fix welfare loss associated with irrational voting?