Yale Economist's Historical Model Predicts Romney Win, But Will This Year Be Different?

There are plenty of competing methods for predicting the outcome of the presidential election.

Most of the ones I look at average national and state polls, like the predictions at RealClearPolitics.

Others account for other factors, like historical trends and the economic outlook. That's the approach taken by FiveThirtyEight, which I tend to think is more accurate.

And still others guess at the results in November based on what's happened in past elections.

One of those methods relies heavily on economics, judging a candidate's chances based on the state of the economy during the campaign.

Ray Fair, an economist at Yale, has put together an algorithm that accurately models the outcome of nearly every election since 1916.

Using several economic indicators, Fair has found that the adage "people vote their pocketbooks" is actually pretty true.

According to The Wall Street Journal, his model looks at several factors:

"The per capita growth rate of gross domestic product in the three quarters before the elections. (Voters seem to remember recent economic history more than they do over the span of the quarter). For the first three quarters of this year, GDP per capita grew at a 1.01% annual rate."

"Inflation over the course of the entire presidential term, as measured by the GDP price index. The annual rate of inflation by this measure was 1.58%."

"The number of quarters during the presidential term that GDP per capita growth exceeded 3.2%. There has been only one such "good news" quarter - the fourth quarter of last year, when GDP per capita grew 3.3%."

Given the poor state of the economy, Fair's model favors Republican Mitt Romney as the winner in this year's election, though not by much.

And many voters still blame the Republicans for the poor economic outlook.

In addition, while economic indicators are lower this year than in most years that an incumbent is reelected, consumer confidence is up, and voters aren't as worried about their economic prospects as they usually are in situations like this.

The race is also so close that the 2.5 percent margin of error on Fair's analysis means either candidate could still come out on top, no matter what the stock market looks like.