PIPE Collaborative Summer Symposium

10:30 am to 11:45 am: Paper 1

The Political Economy of COVID-19 Policy Choices, by Pamela Clouser McCann (USC Price) and Abby Wood (USC Gould)

Abstract: States hold the police power and have regulated pursuant to that power during the COVID-19 pandemic, using gubernatorial executive orders. Statewide mandates regarding closures typically involve exceptions for workers deemed critical to public health and the safety of the community, including those individuals providing basic essential services such as healthcare, power, water, and sanitation services, a subgroup in the population disproportionately populated by employees that are Skilled Through Alternative Routes, or STARs. In this study, we argue that the political-economic environment of states is associated with specific COVID-policy choices.  We marshal several evidentiary domains to conduct the analysis, including text analysis of governors’ pandemic-related executive orders, and analysis of state political-economy pressure.  We hypothesize that EO language around state infrastructure, public health, and economic growth vary with state-level system capacity (infrastructure language), public health risks (public health language), and political-economic factors (economic language).

Discussant: Pamela Ban (UCSD)

11:45 am to 1:00 pm: Lunch and PhD posters

1:00 pm to 2:15 pm: Paper 2

Partisan Polarization and Political Risk, by Sebstian Saiegh (UCSD) 

This study uses market expectations of electorally-induced financial turbulence to investigate the effect of partisan polarization on political risk in the United States. I argue that, to the extent that asset prices are responsive to policy shifts, hedging against an unfavorable election outcome should be more valuable when candidates are expected to adopt very different policies. The findings reveal that, as U.S. national elections became more polarized, investors grew more anxious about large post-electoral price changes, rather than mere exposure to electoral uncertainty. The greater sensitivity of asset prices to electoral outcomes led to an increase in how much investors had to pay to insure themselves against election risk. The intensification of polarization in the Trump era created a significant wedge between market sentiment and electoral forecasts. These findings suggest that partisan polarization can not only affect democratic norms, but can also undermine financial markets’ ability to price political risk.

Discussant: Steven Liao (UC-Riverside)

2:15 to 3:30  pm: Paper 3

Housing Narratives: Understanding Americans’ Mental Models of Housing Markets, by Clayton Nall (UCSB), Chris Elmendorf (UC Davis), and Stan Oklobdzija (UC Riverside)

What are Americans’ mental models of housing markets, and how do these models relate to their support for local housing development? Americans’ responses to proposed housing development have often been framed either in terms of self-interested homeowners blocking housing or renters failing to organize collectively.  Political scientists have tended to assume self-interested behavior without fully understanding how people think about—and often misunderstand—housing markets.  Building on economists’ recent survey-based research on mental models, we focus on the apparent phenomenon of Supply Skepticism: the belief, heavily promoted by leftist housing advocacy campaigns, that additional housing supply will not reduce housing prices (Been et al, 2018).  While people generally have market-skeptical beliefs, we suspect they are more widespread for

housing.  In two national surveys, we present hypothetical scenarios describing sudden increases in housing supply, then elicit predicted price changes in regional housing markets.  We link these predictions to respondents’ generalized beliefs about markets and their tendency toward “zero-sum thinking.”  Our preliminary findings suggest that Supply Skepticism is widespread, weakly related to belief in basic “supply and demand” facts, and moderately associated with opposition to housing development.  We discuss whether these beliefs reveal something unique about public understandings of housing markets or are a product of more generalized Manichaean, zero-sum beliefs about markets and economic elites.

Discussant: Chris Tausanovitch (UCLA)