“It’s the economy stupid” was the de facto slogan of Bill Clinton’s 1992 presidential campaign. (The phrase is attributed to James Carville, whose actual words were “The economy, stupid.”) A number of analysts have found a strong link between the electoral performance of the presidential candidate of the incumbent party and the performance of the economy in the year proceeding the election. (See Nate Silver or Ray Fair.)

In a recent column on VoxEU, George Ward summarizes a paper he has recently written examining the link between incumbent party performance in 134 parliamentary elections in 15 European counties between 1973 and 2012 and the self-reported happiness of the electorates. Happiness is measured by the answer to a question asked in a semiannual survey conducted by the European Union: “On the whole, are you i) very satisfied, ii) fairly satisfied, iii) not very satisfied, or iv) not at all satisfied with the life you lead?”

Figure 1 reports the extent to which a country’s aggregate level of life satisfaction is able to account for the variance in vote shares won by governing parties in general elections over the past four decades. Plotted is the actual vote share against the value predicted from a regression of cabinet vote share on aggregate [happiness] (together with a set of country and year dummies as well as various covariates standard in the cross-country economic voting literature). The regression reveals a significant positive relationship between aggregate happiness indices and cabinet vote share. A one standard deviation change in a country’s self-reported well-being over time is associated with a swing in incumbent vote share of around 8.5 percentage points.

… even once macroeconomic controls like the economic growth, unemployment and inflation rates are included in the equation, [happiness] remains a significant predictor of electoral outcomes. When included together in the equation, both economic growth and life satisfaction are significant predictors of cabinet vote share, with the effect size of [happiness] twice that of growth. Moreover, [happiness] is able to account for more of the variance in government vote share than any one of the standard macroeconomic variables.

Ward’s column is here, while the full paper is here.