Great or grim? Disagreement about Brexit, economic expectations and household spending

Kuang, Pei, Luca, Davide, Wei, Zhiwu and Yao, Yao (2023) Great or grim? Disagreement about Brexit, economic expectations and household spending. III Working Paper (89). International Inequalities Institute, London School of Economics and Political Science, London, UK.

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Abstract

Does political polarization influence economic expectations and behaviour? Utilizing British household surveys and administrative data, we find a strong polarization of economic expectations and behaviour between pro- and anti-Brexit supporters after the once-in-alifetime EU Referendum. We show that the Brexit vote led to a large and long-lasting divergence between Leavers and Remainers in their assessment of the general economic situation, personal circumstances, and spending intentions. Furthermore, on average, a 10% difference in the share of leave voters across local authorities is respectively associated with a 5.98% and 0.78% increase in the gap in the per capita housing transaction volume and licensed automobile stock after the referendum.

Item Type:	Monograph (Working Paper)
Official URL:	https://www.lse.ac.uk/International-Inequalities/P...
Additional Information:	© 2023 The Authors
Divisions:	International Inequalities Institute
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HB Economic Theory J Political Science > JC Political theory
JEL classification:	D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations; Speculations E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E66 - General Outlook and Conditions P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand
Date Deposited:	15 May 2023 13:54
Last Modified:	16 Sep 2023 00:03
URI:	http://eprints.lse.ac.uk/id/eprint/119200

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