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Democrats and Republicans are confident their candidate will win — and that could affect consumer spending after the election

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By Meera Jagannathan

Democrats and Republicans are both highly assured that their candidate will prevail in the presidential election, a new working paper suggests — and the election’s ultimate outcome could have implications for some Americans’ spending decisions.

Some 87% of Democrats expect former vice president Joe Biden to win the 2020 election, while 84% of Republicans expect President Trump to triumph, according to a paper distributed by the National Bureau of Economic Research and authored by researchers at the University of Texas at Austin, the University of California, Berkeley, and the University of Chicago Booth School of Business.

Individuals from both camps appear confident in their projections: Democrats assign Biden a 74% probability on average of winning, while Republicans assign an average probability of 76% to a Trump win, the paper said. Nearly 15% of Democrats project a 100% probability of Biden winning, and more than one in five Republicans say the same of Trump.

“Democrats and Republicans seem to have dramatically polarized expectations about who will win the election and what the probability distribution of election outcomes looks like,” the authors wrote. Among independents, meanwhile, “the chance of Trump and Biden winning is roughly equal to 50%.”

Through survey questions about respondents’ willingness to buy big-ticket items like a car, home or large appliance, the researchers also found that the presidential contest “might trigger a wave of reluctance to consume” post-election, when many people’s preferred candidate loses. 

“This is likely to occur since many individuals of both parties overestimate the probability of their candidate being elected and have very dire views of the economic outlook if the other candidate is elected,” the authors wrote. “An election that does not go their way will lead them to adopt this more pessimistic outlook and likely reduce their spending.”

What’s more, a period of uncertainty between the election and knowing the final result would also depress consumer spending, commentators say, given that markets and consumers both react unkindly to uncertainty.

Some Americans are even stocking up on cash, gas,  prescription medications and food to prepare for possible Election Day unrest. Walmart  WMT c hanged course  and returned ammunition and firearms to store displays after removing the items late last week “after civil unrest,” the company said. The products in question were still available for purchase, but weren’t being openly displayed.

Not everyone agrees with the assessment that spending habits will change post-election, according to a 2018 paper co-written by Amir Sufi, an economist at the University of Chicago Booth School of Business, and Atif Mian, an economist at Princeton University.

“The well-documented rise in political polarization among the U.S. electorate over the past 20 years has been accompanied by a substantial increase in the effect of partisan bias on survey-based measures of economic expectations,” they wrote.

“Individuals have a more optimistic view on future economic conditions when they are more closely affiliated with the party that controls the White House, and this tendency has increased significantly over time,” they added. “Individuals report a large shift in economic expectations based on partisan affiliation after the 2008 and 2016 elections, but administrative data on spending shows no effect of these shifts on actual household spending.”

Don’t miss: Opinion: Why presidents shouldn’t get credit or blame for the economy

Americans have starkly different expectations of the economy that hinge on who wins the election: “Republicans expect a fairly rosy economic scenario if Trump is elected but a very dire one if Biden wins,” the authors of the most recent paper released this week wrote.

While Democrats “expect calamity if Trump is reelected but an economic boom if Biden wins.”each political party’s strong belief in their candidate isn’t due to a lack of attention paid to the election, the authors added; close followers of the election “are likely to hold the most extreme views” of its likely outcome.

Rather, people appear to be tuning in to different information sources that steer them to different conclusions: Many Republicans’ preferred news channel is Fox News, according to the study, while many Democrats’ preferred TV news source is CNN.

See also: What Trump and Biden tax policies could mean for your paycheck, tax return, investments and retirement savings

Once the election is decided, the paper added, “one group of voters will become much more pessimistic than they have been so far” and could also be more likely to question the election result’s legitimacy if they didn’t believe such an outcome could be possible.

“Members of the losing party, given their pessimism about the economy under the other candidate, will therefore become significantly more pessimistic about the overall economic outlook,” the researchers wrote, while members of the winning party will retain their optimism.

The paper analyzed results from a representative online survey of 5,000 respondents conducted Oct. 19 to Oct. 21. It included 41% who leaned toward the Republican Party; 36% who leaned toward the Democratic Party; and 23% “Other” respondents who leaned toward the Green party, Libertarian party, other party or no party, or preferred not to answer.

FiveThirtyEight’s model projected Biden had a roughly 89% chance of winning as of Monday, while RealClearPolitics’ polling average had Biden ahead by 6.8 percentage points on the eve of Election Day. While polling at the national level and in many swing states suggested Biden is favored to win the election, forecasters were quick to point out that Trump still has a path to victory

As CNN reporter John King pointed out , Trump’s path to victory could lie in winning Michigan or Pennsylvania in what some commentators say would be less likely given that many other swing states are leaning towards a Joe Biden victory.

Showing respondents the range of outcomes possible within a poll’s margin of error led them to update their expectations toward a tighter race, the authors wrote. They emphasized the importance of Americans grasping the uncertainty that exists around electoral outcomes, adding that those unable to fathom a scenario where their candidate loses may be unlikely to treat their candidate’s defeat as the result of “a fair and free election.” 

“To the extent that increasingly polarized voters also see little chance of their candidate losing, as we document here, electoral outcomes will progressively be seen as illegitimate by rising shares of the population,” they wrote. “Ensuring that voters can correctly distinguish between what they want to see happen and what is likely to happen is therefore fundamental to sustaining a functioning democracy.”

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