Americans elect a President every 4 years We would like to k

Americans elect a President every 4 years. We would like to know if the vote share of the incumbent U.S. president is associated with the growth in income over the previous 4 years. Y = “incumbent party vote share” variable is the percentage of Democrat and Republican votes that went to the incumbent President. X = the percentage change in income over the previous 4 years. The data are from US Presidential elections from 1948 to 2012. The fitted regression results are the following: Y = 45.9 + 2.3X. What is the correct interpretation of the slope coefficient, b2?

A. A 1 percentage point change in the vote share causes a 2.3 percentage point change in Income?

B. The incumbent party\'s vote increased by 2.3 percentage points for every 1 percentage point increase in income.

C. A 2.3 percent change in income is associated with a 1 percent change in vote share.

D. None of these answers are correct.

Solution

Here the slope coefficient is 2.3 that is dY/dX=2.3. If X is increased 1% then Y is increased by 2.3%. That is 1% change in income result in 2.3% change in incumbent party\'s vote share.

Therefore the option B is correct.