The political advantage of a volatile market: the relationship between Presidential popularity and the ‘investor fear gauge’ |
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| Authors: | Joe Schwartz Scott Hoover Adam Schwartz |
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| Affiliation: | 1. Georgia College and State University, USA;2. Assistant Professor of Marketing.;3. Washington and Lee University, USA;4. Associate Professor of Business Administration. |
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| Abstract: | - The Chicago Board Options Exchange's (CBOE) Volatility Index (VIX) is the premier established benchmark of near‐term market volatility. It is also referred to as the ‘investor fear gauge’ because it provides a consistent measure of market turmoil. We examine the VIX as it relates to Presidential popularity as indicated by the Gallup Organization's ongoing poll of US Presidential approval ratings. Our analysis indicates that the expected volatility of the market is highly related to Presidential approval. We then examine the strength and implications of this relationship in order to further establish the link between the economy and Presidential approval.
Copyright © 2008 John Wiley & Sons, Ltd. |
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