CEE MISSION
The mission of the Council for Economic Education is two-fold: To advocate for
better and greater school-based economic and personal finance education at the
K-12 level; and to educate young people in the United States and around the
world, primarily through well prepared teachers, so they may become empowered
with economic and financial literacy.
Council for Economic Education
122 East 42nd Street, Suite 2600
New York, NY 10168
Phone: 212-730-7007 or 1-800-338-1192
Fax: 212-730-1793
www.councilforeconed.org
LESSON 13 – PUBLIC CHOICE: ECONOMICS GOES TO WASHINGTON
AND INTO THE
VOTING BOOTH
Election Economics:
http://www.econedlink.org/electionlessons/
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 13 – PUBLIC CHOICE: ECONOMICS GOES TO WASHINGTON
AND INTO THE
VOTING BOOTH
Lesson 3: REVISED “Voters and Elections”
This lesson is from “Civics and Government: Focus on Economics,” published by CEE. The
lesson discusses the costs and benefits of voting. From analysis, students try to estimate who is
more or less likely to vote in an election.
Lesson 6: REVISED “Can Election Futures Markets Be More Accurate Than Polls?”
This lesson is from “Civics and Government: Focus on Economics,” published by CEE. The
lesson introduces students to polls and the Iowa election markets.
Lesson 1: NEW “Margin of Error”
This new lesson introduces students to the concept of margin of error, which is often
reported, but rarely understood.
Lesson 8: REVISED “Economic Misery and Presidential Elections”
This lesson is from “Civics and Government: Focus on Economics,” published by CEE. The
lesson looks at past U.S. elections and finds that economic conditions can play a large role in
whether a party retains the presidency.
Lesson 13: “Public Choice Goes to Washington and into the Voting Booth”
This lesson is from “Focus: High School Economics,” published by CEE. The lesson conducts
mock elections in which students learn why people may decide not to vote in an election.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 13 – PUBLIC CHOICE: ECONOMICS GOES TO WASHINGTON
AND INTO THE
VOTING BOOTH
Agendas
Suggested evening workshop: 4 hours
4:00 to 4:15
Introduction
4:15 to 4:45
Lesson 3: REVISED “Voters and Elections”
4:45 to 5:30
Polls?”
Lesson 6: REVISED “Can Election Futures Markets Be More Accurate Than
5:30 to 6:00
Dinner Break
6:00 to 6:45
Lesson 1: “Margin of Error”
6:45 to 7:20
Discussion of Economic Election Issues
7:20 to 7:50
Lesson 8: REVISED “Economic Misery and Presidential Elections”
7:50 to 8:00
Conclusions
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 13 – PUBLIC CHOICE: ECONOMICS GOES TO WASHINGTON
AND INTO THE
VOTING BOOTH
Agendas
Suggested day workshop: 6 hours
9:00 to 9:15
Introduction
9:15 to 10:00
Lesson 13: “Public Choice Goes to Washington and into the Voting Booth”
10:00 to 10:15 Break
10:15 to 10:45 Lesson 3: REVISED “Voters and Elections”
10:45 to 11:30 Lesson 6: REVISED “Can Election Futures Markets Be More Accurate Than
Polls?”
11:30 to 12:00 Lunch
12:00 to 12:45 Lesson 1: “Margin of Error”
12:45 to 2:00
Discussion of Economic Election Issues
2:00 to 2:45
Lesson 8: REVISED “Economic Misery and Presidential Elections”
2:45 to 3:00
Conclusions
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 13: PUBLIC CHOICE: ECONOMICS GOES
TO WASHINGTON AND INTO THE VOTING BOOTH
VISUALS
LESSON 13 – PUBLIC CHOICE: ECONOMICS GOES TO WASHINGTON
AND INTO THE
VOTING BOOTH
VISUAL 13.2
COSTS AND BENEFITS OF VOTING: ELECTION 1
Benefits of Electing
Group #
Option A
Option B
1
$0
$5
2
$0
$5
3
$3
$0
4
$3
$0
5
$5
$0
1. What are the total benefits if option A is chosen?
2. What are the total benefits if option B is chosen?
3. If each of the five groups has the same number of voters, will
option A or option B be chosen?
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 13 – PUBLIC CHOICE: ECONOMICS GOES TO WASHINGTON
AND INTO THE
VOTING BOOTH
VISUAL 13.2
COSTS AND BENEFITS OF VOTING: ELECTION 2
Benefits of Electing – Pay $4 to Vote
Group #
Option A
Option B
1
$0
$5
2
$0
$5
3
$3
$0
4
$3
$0
5
$5
$0
1. What are the total benefits if option A is chosen?
2. What are the total benefits if option B is chosen?
3. If each of the five groups has the same number of voters, will
option A or option B be chosen?
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 13 – PUBLIC CHOICE: ECONOMICS GOES TO WASHINGTON
AND INTO THE
VOTING BOOTH
VISUAL 13.3
COSTS AND BENEFITS OF VOTING: ELECTION 3
Benefits of Electing
Group #
Option A
Option B
1
$0
$10
2
$0
$10
3
$3
$0
4
$3
$0
5
$5
$0
1. What are the total benefits if option A is chosen?
2. What are the total benefits if option B is chosen?
3. If each of the five groups has the same number of voters, will
option A or option B be chosen?
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 3: VOTERS AND ELECTIONS
VISUALS
LESSON 3 – VOTERS
AND
ELECTIONS
VISUAL 3.1
THE COSTS OF VOTING
1. Dollar costs. No dollar costs may be imposed by fees or taxation. Amendment 24 to the
U.S. Constitution rules out dollar costs:
Section 1. The right of citizens of the United States to vote in any primary or other
election for President or Vice President, for electors for President or Vice President, or
for Senator or Representative in Congress, shall not be denied or abridged by the
United States or any state by reason of failure to pay any poll tax or other tax.
2. Other costs. While the Constitution prohibits monetary charges, this does not mean
that voting is entirely without costs. Voters will incur opportunity costs. The
opportunity cost of voting is what a voter gives up in choosing to vote. Here are some
possible opportunity costs:
•Time taken to register
•Time to find a voting location, or to vote via absentee ballot.
•Time taken to vote, which may also mean lost wages for voters who
miss work; or babysitting or transportation costs.
•Time needed to investigate candidates and issues.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 3 – VOTERS
AND
ELECTIONS
VISUAL 3.2
TOP TEN REASONS REGISTERED VOTERS GAVE FOR NOT VOTING IN
2008
Reason
All
18-24
10. Inconvenient Polling Place
2.7%
2.8%
9. Transportation Problems
2.8%
2.4%
8. Forgot
2.8%
4.5%
7. Don’t Know/Refused to Answer
7.0%
11.2%
6. Registration Problems
8.0%
9.0%
5. Out of Town
8.8%
14.2%
4. Didn’t Like the Candidates
12.9%
8.0%
3. Not Interested
13.4%
12.1%
2. Illness or Disability
14.9%
3.2%
1. Too Busy
17.8%
21.0%
In 2008, citizens aged 18-24 made up 12.6% of the voting age population, but only 9.3% of the voters.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 3 – VOTERS
AND
ELECTIONS
VISUAL 3.4
WHO VOTES MORE?
Of all citizens, who voted most, percentage-wise, in the 2008 presidential election?
Men or Women
Women 65.7 to 61.5
White or Black or Asian
White 66.1 - Black 64.7 - Asian 47.6
Naturalized Citizen or Native Born
Native 64.4 to 54
Married or Never Married
Married 69.9 to 53.5
Separated or Divorced
Divorced 59 to 53.5
Low Income or High Income
High Income 91.8 to 51.9
Employed or Unemployed
Employed 65.9 to 54.7
H.S. Degree or Bachelor’s Degree
Bachelor’s Degree 77 to 54.9
Minnesotan or Floridian or Hawaiian
MN. 75 - FL. 63.8 - HI. 51.8
Veteran or Non-Veteran
Veteran 70.9 to 62.8
Renter or Homeowner
Homeowner 67.8 to 51.6
Young (18-24) or Old (45-64)
Old 69 to 49
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 3 – VOTERS
AND
ELECTIONS
DEBRIEFING
Who do you think politicians will pay more attention to during an election?
What can be done to lower the opportunity cost of voting so more people can vote?
Pay people to vote…
Mandatory voting….
Advertising campaign by government…
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 6: CAN ELECTION FUTURES MARKETS
BE MORE ACCURATE THAN POLLS?
VISUALS
LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?
VISUAL 6.1
COMPARING POLLS AND MARKETS
Firm
When
Conducted
Obama
McCain
Undecided
Obama Lead
Election
Result
11/4
52.9
(53.7)*
45.7
(46.3)
-----
7.3
(7.4)
Harris
(Online)
10/30-11/3
52
44
0
8
Fox News
11/1-2
50
43
5
7
Gallup
10/31-11/2
55
44
0
11
Zogby
10/31-11/3
54
43
3
11
GWU
11/2-3
50
48
0
2
NBC/WSJ
11/1-2
51
43
2
8
ABC/WP
10/31-11/3
53
44
2
9
CBS/NYT
10/31-11/2
51
42
5
9
CNN/USA
10/30-11/1
53
46
1
7
IOWA EM
11/3
53.55
46.45
------
7.1
* The number in parenthesis is the share of vote between two candidates, which is comparable to the Iowa EM vote
share payoff.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?
VISUAL 6.3
RESULTS FOR THE PRESIDENTIAL ELECTION
•
•
Through all the twists and turn of the primary campaign and the final
campaign, the Iowa Electronic Markets consistently picked Barack Obama as
the leader.
As illustrated in the figure below, from June 2006 until November 2008,
Barack Obama led by similar margins to the final election outcome.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?
THIS YEAR’S ELECCTION
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 1: MARGIN OF ERROR
VISUALS
LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?
We need 9 groups
• Each group will get a bag. Do not look inside.
• Each bag contains white and red (or maybe green)
chips
• Each group should have a pollster and a record keeper.
• When instructed, the groups will “poll” by having the
pollster draw a chip. The record keeper will record its
color. The chip is then put back into the bag.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?
Margin of Error
• Margin of error is: 1 / √n for a 95% confidence level
(This is extremely simplified.)
For our sample of 16, the margin of error is 25%.
For your group, find a confidence interval (your estimate
plus/minus the margin of error).
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?
Look in bag
• 65% is actual value
• How many polls resulted in that value being within the
confidence interval!
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 1 – MARGIN
OF
ERROR
VISUAL 1.1
Number polled from a
large population
Margin of Error with a
95% Confidence Level
144
8.3%
400
5.0%
1,000
3.2%
2,000
2.2%
3,000
1.8%
4,000
1.6%
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
ISSUES
Lesson 11: How Should Governments
Structure the Tax System?
LESSON 8: ECONOMIC MISERY AND
PRESIDENTIAL ELECTIONS
VISUALS
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL 8.3
SOME ECONOMIC RULES THAT WORK WELL
A Real GDP per capita growth rule:
The incumbent party usually wins if…
The growth rate of Real GDP per capita is greater than or equal to
2.5% during the year of the election.
A Misery Index rule:
The incumbent party usually wins if…
The Misery Index has not increased from the year prior to the
election.
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL FOR STEP 16 – Predicting the Next Election
Year
Growth
in Real
GDP
per
Capita
Unempl Inflatio
oyment n Rate
Rate
Misery
Index
2009
-4.3
9.3
-0.4
8.9
2010
2.2
9.6
1.6
11.2
2011
0.9
8.9
3.2
12.1
2012
???
???
???
???
Growth
Rule
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
Misery
Index
Rule
Candida Incumb
tes
ent
Party
Wins or
Loses?
Obama
vs.
Romney
LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS
VISUAL FOR STEP 16 – Predicting the Next Election
Year
Growth
in Real
GDP
per
Capita
Unempl Inflatio
oyment n Rate
Rate
Misery
Index
2009
-4.3
9.3
-0.4
8.9
2010
2.2
9.6
1.6
11.2
2011
0.9
8.9
3.2
12.1
2012
???
???
???
???
May
2012
Data
1.1
8.2
1.7
9.9
Growth
Rule
Misery
Index
Rule
Romney Obama
Win
Win
ELECTION LESSONS © COUNCIL FOR ECONOMIC EDUCATION, NEW YORK, NY
Candida Incumb
tes
ent
Party
Wins or
Loses?
Obama
vs.
Romney ???
Spring 2008
Spring 2012