Fair model now favors Trump – MickBransfield.com

With President Joe Biden out of the presidential race, assumed Democratic nominee Vice-President Kamala Harris is catching up to Former President Donald Trump (if not passing him) in the polls and the prediction markets.

One exception to this trend is Professor Ray Fair’s economic model. Fair’s model had Biden receiving almost 52% of the vote but now has Harris at 49%. This model is not driven by polls or gamblers but by four fundamentals (incumbency, white house control, duration in the White House, and war) and three economic indicators (GDP growth, inflation, GOP growth above 3.2%). Despite excluding public opinion and current events, the model has performed well in forecasting presidential vote totals based on economic indicators.

Behind the model

The model is represented as:

Democratic Vote Percentage ~ I + DPER + DUR + WAR + (G * I) + (P * I) + (Z * I)

Which can be shortened to:

Democratic Vote Percentage = 47.37 + .708*G – .606*P + 0.865*Z

47.37 is the fundamentals constant (I + DPER + DUR + WAR) that *probably* will not change unless Kamala Harris becomes President before Election Day.

The three economic variables are represented by .708*G – .606*P + 0.865*Z

The variables above represent:

I = Democratic presidential incumbent at the time of the election
DPER = Democratic presidential incumbent is running again
DUR = Either party has been in the White House for one term
WAR = A World War is occurring
G = growth rate of real per capita GDP in the first 3 quarters of 2024 (annual rate)
P = growth rate of the GDP deflator in the first 15 quarters of the Biden administration, 2021:1-2024:3 (annual rate)
Z = number of quarters in the first 15 quarters of the Biden administration in which the growth rate of real per capita GDP is greater than 3.2 percent at an annual rate

Here are the updated economic variables and outputs with Harris (specifically anyone but an incumbent President) as the Democratic nominee for 2024:

Date	G	P	Z	VP
7/25/2024	1.7	4.54	4	49.28
4/25/2024	2.23	4.62	4	49.61
1/25/2024	1.8	4.55	4	49.35

You can find the rest of Fair’s updated “Biden-less” model forecasts on his page for the 2024 elections.

Plugging in the latest economic variables gives us the following:

Democratic Vote Percentage = 47.37 + .708*G – .606*P + 0.865*Z

Democratic Vote Percentage = 47.37 + .708*1.7 – .606*4.54 + 0.865*4

Democratic Vote Percentage = 47.37 + 1.2036 – 2.75124 + 3.46

Democratic Vote Percentage = 47.37 + 1.91

Democratic Vote Percentage = 49.28

Fair notes on his website that the Democratic decline in his model is mostly due to Harris’ lack of incumbency:

We now know that Biden is not running, which means there is no incumbency advantage. The incumbency coefficient (for DPER) is 2.11, so the Democratic prediction is now 2.11 percentage points lower, other things being equal.

A previous article goes into more depth on the model here (granted with Biden as the incumbent running for re-election.) Fair also published regular updates to the model weights, the latest residing here.

Not Forecasting the chances of winning

Unlike models by Nate Silver, 538, and The Economist, the Fair model doesn’t forecast the probability of winning, but the two-party vote share of the Democratic candidate. “Two party vote share” means that this only counts Republican and Democratic general election candidate votes excluding all independent candidate and third-party votes:

Democratic Two-Party Vote Share = Democratic Votes / (Democratic Votes + Republican Votes)

Fair’s two-party vote model does NOT reflect any of the following

Third-party votes
The Electoral College
Probability of winning

Remember that Al Gore (2000) and Hillary Clinton (2016) both had two-party vote shares above 50% and still lost the election.

Other two-party vote forecasts

The Iowa Electronic Markets (IEM) has been operating vote share prediction markets since 1988. IEM’s 2024 Presidential vote share market currently had the democratic vote share percentage at $0.57/share on July 25^th (the day Fair’s model was updated) but dropped to $0.48/share the following day.

Manifold has multiple markets (with low liquidity) trading on the vote share. Two of those that are operating as a percentage are:

Strong track record

The mean absolute error (MAE) of Fair’s model from 1980 to 2020 is 3.94, meaning the model is within 4 points on average of the Democratic candidate’s two-party vote share. Again, this is accomplished solely on fundamentals and economic indicators without factoring polls, politics, policy, or even the candidates.

Behind the model

Not Forecasting the chances of winning

Other two-party vote forecasts

Strong track record

Further Reading