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October 31 2008

The Bread and Peace model is:

where Vote is the percentage share of the two-party vote for president received by the candidate of the incumbent party; is the annualized quarter-to-quarter percentage rate of change of per capita real disposable personal income; Fatalities denotes the cumulative number of American military fatalities per million US population in Korea, Vietnam and Iraq during the presidential terms preceding the 1952, 1964, 1968, 1976 and 2004 elections. (See Hibbs 2004 and Hibbs 2008 for details.) The coefficient estimates are , , , and with and RMSE=2.37.

At Election Day US military Fatalities in Iraq will be about 4,200 or 13.8 per million US population. Preliminary data for personal income in the third quarter of 2008, along with revisions to data for some earlier quarters, were released by the Bureau of Economic Analysis (www.bea.gov) on October 30 2008. Those data along with my (perhaps optimistic) assumption that per capita real disposable personal income growth in 2008q4 will be in the 0 to -1 percent per annum range imply that weighted-average real income growth over the incumbent term, , will be in the vicinity of 0.215.

It follows that the Bread and Peace model predicts a Republican two-party vote share in 2008 of about 46.25%: