There is a Survation poll in the Daily Star on Sunday with topline figures of CON 32%, LAB 34%, LD 12%, Others 22% (including UKIP 11%, Green 4%, BNP 2%). Clearly 22% is a very high total for Other parties, and while I don’t have a spreadsheet of past UKIP polling figures, their highest rating in a GB Westminster voting intention poll that I’m aware of is this 10% from Harris in 2009, so this would be their highest.

The reason for these high figures is fairly straightforward: Survation prompted for the minor parties in their voting intention question. In other words, instead of asking something along the lines of “If there was a general election tomorrow, would you vote Con, Lab, Lib Dem or another party” they asked something like “If there was a general election tomorrow, would you vote Con, Lab, Lib Dem, UKIP, Green, BNP or another party” (in fact, they randomised the order of Con, Lab, LD & UKIP).

These days all the main pollsters include the name of the main three parties in their voting intention question, but none of them list the smaller parties. This makes a clear difference to the answers you get – if people are reminded of the existence of minor parties, then more people say they would vote for them. This Survation poll itself is good evidence of the effect – when they ran a poll without prompting earlier this month they found UKIP on 4% (though some of the difference could also have been between telephone and online methods). There is also the case of YouGov’s Scottish election polling in 2007, where the prompt was changed half way through the campaign to include minor parties – the effect was to increase support for “others” from 11% to 19%, and to change support for the Scottish Greens from 4% to 9% (in the event, the Scottish Greens got 4%).

Now, I sometimes see supporters of minor parties complaining about pollsters not including their parties in the prompt and saying it is unfair. I suppose in many ways it isn’t, and if one was arguing from first principles one might very well think that, given all the parties are on the ballot paper, they should all be in the prompt.

The reason other pollsters don’t include minor parties in the prompt is, however, because in practice not including them produces accurate results. There is no particular logic to it, it is just what has worked in the past. At the last election no pollster included minor parties in their main voting intention prompt, and the polls were pretty accurate in their predictions of support for minor parties:

ACTUAL MORI ICM Populus YouGov
UKIP 3.1% 3% 3% 2% 3%
BNP 1.9% 1% 2% 2% 2%
Green 1.7% 2% 1% 1% 1%

Including minor parties in the prompt would lead to significantly higher levels of support in polls, yet when compared to actual election results polls do not appear to be significantly underestimating support for minor parties. Certainly in the case of UKIP, most polling companies were pretty much spot on at the last election.


65 Responses to “Survation, UKIP and prompting for minor parties”

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  1. leftylampton

    oh and this

    http://politicalcorrection.org/blog/201108290003

    “Companies aren’t hiring because consumers aren’t buying”/ “It’s been clear for quite some time that companies aren’t hiring because of a lack of demand, and that the basic Republican (Conservative-LD coalition) approach to the economy is wrong”

  2. Bill

    Let me see if I understand you

    Inflation is proof of a supply side problem. In which case

    Deflation is proof of a demand side problem.

    Am I right so far?

    Now the BoE has admitted that QE causes inflation and they are even slightly proud about this. In fact they say that without QE there was a serious risk of deflation. So the environment is deflationary but because of QE we have inflation which is giving false signals. Yet another time when the real world makes monkeys out of theoretical economic models. We do have a demand problem,QE hasn’t created demand it has created the illusion of demand.

  3. @Bill Patrick – “Inflation is at over 5%. In what sense is demand weak right now? If demand is not weak, then it’s not an adequate explanation of low growth.”

    I’m afraid I have to take issue with you on this. I’ve had a quick scout around and to be perfectly honest I can’t find a single commentator or economic theorist that is arguing that demand in the UK is currently strong and causing inflation. I actually think you are being really quite peverse in arguing your case.

    Where I think you are going wrong is in making the assumption that there is only one driver of inflation – namely demand. One of the key reasons our inflation levels are high is global demand for commodities pushing up prices. Currency movements, lack of capacity (there is insufficient capacity in the UK diesel refinery sector – this is the reason why diesel is now more expensive than unleaded as producers can command a better price) and tax issues (2.5% rise in VAT) will all affect inflation, without altering the amount of actual stuff being bought.

    You seem to be citing higher inflation as proof of stronger demand, but you’ve got the relationship the wrong way round. Higher inflation means people can buy less stuff with their money. As the amount of money (wages, government spending, company profits) is not keeping pace with inflation, and in the case of householders actually falling quite sharply, the higher inflation will actually cause falling demand. In the UKs current circumstances, the causality is running the other way.

    Would that we had a bit of demand led inflation. Worth noting that the BoE is now forecasting a sharp fall in inflation over the next year. They are saying this as they are expecting certain factors (VAT rise) to drop out of the equation, but also they are anticipating very weak demand.

  4. “Including minor parties in the prompt would lead to significantly higher levels of support in polls, yet when compared to actual election results polls do not appear to be significantly underestimating support for minor parties.”

    Are the SNP and Plaid included in these prompts? Or are these polls only of England?

  5. RiN,

    “Inflation is proof of a supply side problem. In which case

    Deflation is proof of a demand side problem.

    Am I right so far?”

    We need not be in outright deflation. A fall of NGDP to 2% would crash our economy in a demand-side way, without actually causing prices to fall.

    I also wouldn’t say that the inflation is sending the wrong signals. We have an economy that is well below capacity. Signals need to be sent to producers to produce. The inflation is a part of the cure; the fact that it is so persistant is a sign of a more fundamental weakness in the patient.

    The rest of your comment was hard to follow.

  6. Bill

    I’m not surprised, all of your comments regarding inflation and demand are hard to follow. When I try to think like you I get hopelessly confused. Which would explain why you found it hard to follow the rest of my comment.

  7. Alec,

    “I’m afraid I have to take issue with you on this. I’ve had a quick scout around and to be perfectly honest I can’t find a single commentator or economic theorist that is arguing that demand in the UK is currently strong and causing inflation.”

    I am open to any factual rebuttal. If, for instance, someone can show that NGDP growth (the best single indicator of demand) has fallen below its trend rate, I shall happily say that demand is weak. Thus far, I am yet to hear a textbook explanation of why demand is weak in the UK; all I have heard is stuff about real wages (as if it wasn’t possible to have falling real wages and high aggregate demand!) and the old fallacy that demand must be weak if real output growth is low.

    Note in advance that I’m NOT saying that demand is the sole cause of our current inflation. It is a necessary condition, however; if aggregate demand wasn’t such that NGDP is growing at its trend rate of about 5% per year, then the UK wouldn’t have inflation.

    It is true that the unusual factor (the persistent supply-side weakness of the UK economy) is cost-push and in this sense one can say that the UK has a cost-push inflation problem.

    “Where I think you are going wrong is in making the assumption that there is only one driver of inflation – namely demand.”

    See my comment at 1:27. To quote myself from a few hours ago-

    “Inflation is always the result of the COST OF PRODUCTION/SALE + the level of spending. If the UK has <5% NGDP growth and yet inflation is around 5%, then that indicates that the UK is dealing with costs much worse than other countries; i.e. the UK has structural problems."

    (Ostentatious emphasis added.)

    It is fallacious to say either that our high inflation right now is either simply a result of supply problems OR simply a problem of demand. If we had NGDP growth at 0%, we'd have no inflation (and our economy would fire down the toilet at an astonishing pace). If we had the underlying supply-side strength we had in previous recoveries, we would have lower inflation.

    The fact that inflation is high while real growth is so low is an indicator that the explanation of the LEVEL of inflation is supply-side. It can't just be oil prices or whatever, though, because countries like Germany, Japan, the US and indeed most of the world have better splits between inflation and growth than the UK.

    Does the UK have a "cost-push" inflation problem? Yes. But the fact that such inflation is at 5%, i.e. about our trend rate of NGDP growth, PROVES that the UK does not have a problem with inadequate aggregate demand.

    "You seem to be citing higher inflation as proof of stronger demand, but you’ve got the relationship the wrong way round. Higher inflation means people can buy less stuff with their money. As the amount of money (wages, government spending, company profits) is not keeping pace with inflation, and in the case of householders actually falling quite sharply, the higher inflation will actually cause falling demand. In the UKs current circumstances, the causality is running the other way."

    This is pure voodoo economics: prices are a symptom of demand, not a cause; for prices to go up, there must first be expenditure. Inflation is high because demand is up (at about 5% when measured by NGDP) but real output is stagnant.

    The BoE has been forecasting an imminent fall in inflation for quite some time, mainly because they have overestimated the ability of the UK economy to respond productively to the increase in demand since late 2009. Their chief reason for expecting a fall in inflation is that they expect growth to go up in 2012 (I hope they are right). My suspicion, looking at the demand for inflation-linked bonds, is that they are wrong.

    The BoE should keep on doing what they're doing: keep NGDP at 5%. That and only that is a sensible measure of demand, and the BoE controls UK demand in the post-1997 system (that was Brown's point). They took the right move on QE2, but ultimately they cannot get us out of this stagflationary period; they can only keep us out of a demand-squeeze, which would be even worse.

    "I actually think you are being really quite peverse in arguing your case."

    That's odd, because everything I am saying is textbook economics: if NGDP is at 5% and inflation is at about 5%, that indicates supply-side problems; if NGDP is at 5%, demand is not weak; no demand, no inflation etc. etc.

    http://econlog.econlib.org/archives/2011/07/the_power_of_fo.html

    http://www.themoneyillusion.com/?p=9500

    http://www.bized.co.uk/virtual/bank/economics/mpol/inflation/causes/theories1.htm

    There is nothing perverse about saying that demand is not weak when expenditures on final goods are increasing at a rate of 5% per year, unless you're also willing to argue that demand was weak from 1992-2007…

    Anyway, I continue to await a cogent argument that the problem is inadequate aggregate demand. And if the problem isn't inadequate aggregate demand, then we should be sceptical about those who insist that it is the solution.

  8. RiN,

    It’s hard to talk about this subject without being able to use basic 1rst year economics terms e.g. SRAS and LRAS curves. Here’s an intro to the textbook model of inflation-

    http://www.whitenova.com/thinkEconomics/simul.html

    As you can see, if AD is steady and the SRAS curve is weak, you get a stagflationary situation. This is the situation which we are in right now. There is no demand problem, by any statistical measure of expenditure.

    Cost-push inflation (if NGDP is at trend) is a necessary phenomenon, since the prices act to encourage producers to produce. Persistent cost-push inflation is an indication that the productive part of the economy is in trouble.

  9. Bill Patrick

    Your A level devotion to mainstream economics requires that you have a look at these two texts:

    h ttp://www.amazon.co.uk/Economics-Anti-Textbook-Critical-Thinkers-Microeconomics/dp/1842779397

    Mainstream textbooks present economics as an objective science free from value judgements; that settles disputes relatively easily by testing hypotheses; that applies a settled body of principles; and contains policy prescriptions supported by a consensus of professional opinion. The Anti-Textbook argues that this is a myth – one which is not only dangerously misleading but also bland and boring. It challenges the mainstream textbooks’ assumptions, arguments, models and evidence.

    h ttp://www.amazon.co.uk/Delusions-Economics-Misguided-Certainties-Hazardous/dp/1848139225

    Rather than enter into existing debates between different orthodoxies, Rist instead explores the circumstances that prevailed when economics was ‘invented’, and the resultant biases that helped forge the construction of economics as a ‘science’. In doing so, Rist demonstrates how these various presuppositions are either obsolete or just plain wrong, and that traditional economics is largely based on irrational convictions that are difficult to debunk due to their ‘religious’ nature.

  10. I’m afraid that book (however good or bad) is tremendously irrelevant to whether or not the UK has inadequate demand.

    BTW, there are plenty of things I don’t like about mainstream economics. Being able to describe macroeconomic situations with an AS/AD graph is not one of them.

    I’ve read enough “critiques of economics” books to know that they generally aren’t worth reading and (dare I say it?) they are usually better politics than they are economics or philosophy. The most thought-provoking “critique of economics” books are the least dramatic and sweeping.

  11. @Bill Patrick – thanks for the lengthy response, but I think I’ve sorted out where we differ.

    You are continually returning to the trend growth on NGDP of 5%, using this as a basis for assuming we don’t have a demand problem. Perhaps it’s this assumption that is wrong?

    2011 Q2 NGDP has been revised down to 3%, and is falling sharply. The recession saw NGDP fall to below -3% before rising to touch +4% very briefly in Q3 2010, but has been falling quickly since then. We haven’t had trend growth of 5% NGDP since Q3 2008 according to the ONS.

    What is interesting is the change in basic and market pricing. The figures I used above were for basic pricing, which strips out VAT changes. Using market pricing, the effect of the VAT cut and then the rise to 20% means that NGDP plunged to -5% before recovering briefly to +5%.

    On both counts it is still falling sharply. Strip out VAT and you can see how bad the problem is. The ONS have said (19th Oct 2011) that Q2 NGDP growth using the basic pricing is just 1.9%. As the FT commented;

    “Strip out the VAT rise and underlying nominal GDP (at basic prices) grew by 1.9 per cent – split into 1.4 per cent inflation and 0.5 per cent growth. Worrying about inflation in this climate is crackers…”

    You said “I am open to any factual rebuttal. If, for instance, someone can show that NGDP growth (the best single indicator of demand) has fallen below its trend rate, I shall happily say that demand is weak.”

    Does this fit the bill?

  12. Alec,

    “You are continually returning to the trend growth on NGDP of 5%, using this as a basis for assuming we don’t have a demand problem. Perhaps it’s this assumption that is wrong?”

    I do think that there was a point midway through the year that NGDP was slowing and the return to normality in adjusted M4 growth stalled. For that reason, I’ve been very supportive of QE2. It looks like QE2 was even more necessary than I thought.

    Still, your figures do indeed suggest that the UK has a BIT of a demand problem. It would be desirable for the Bank of England to (a) continue with QE2 and (b) just set an NGDP target already, since they’ve been targeting NGDP in effect for ages; when they’ve chosen inflation over NGDP as a target, things have gone horribly wrong.

    So, on the basis of the Q2 figures, I’m happy to admit that the UK has an AD problem, at least since Q2 (i.e. it doesn’t explain the contraction of Q4 2010).

    In an odd way, I’m relieved: we know how to get out of AD crises in countries like the UK (i.e. with monetary sovereignty) pretty quickly. There is no real way of getting out of an AS problem quickly.

    Going back to point (b), one thing that would automatically put GO down as a great chancellor in my book would be if he shifted the Bank of England’s target from CPI to NGDP.

  13. @Bill P – have you seen this – http://www.adamsmith.org/files/ASI_NGDP_WEB.pdf ?

    I haven’t got to grips with it yet but it looks interesting. The recent experience of low inflation but highly destabilising asset bubbles certainly seems a strong case for NGDP targeting.

  14. Alec,

    Yes, I’ve become quite a fan of Scott Sumner’s work in recent years. It’s odd stuff to read from a monetarist like Sumner, since back in the old days (and I mean the REALLY old days, when Maggie was in Number 10, Labour were anti-Europe and the world wondered whether Reagan or the Soviet leader of that particular year was more senile) targeting “money GDP” (as it was known back then) was exclusively the preserve of Keynesians like Russell Jones and Sam Brittann circa 1967.

    The key idea is that while there are some benefits from keeping the money supply steady, the demand to hold money is not a constant and it can go through some pretty huge exogenous shocks, especially as a result of regulation/deregulation. So the central bank needs to adjust monetary policy in line with the demand to hold money, such that nominal expenditures chug along at a steady rate.

    I’m not so sure about some of Sumner’s instrumental proposals (the NGDP futures market and negative interest rates on excess reserves) because they are untested/largely untested. But the idea is a sound one and one that Keynesians, monetarists and even some Austrians can get behind in principle. In that respect, it’s a natural conclusion of the gradual development of consensus in monetary policy from about 1968 (when Milton Friedman fired the first guns against the Philipps Curve) and through the 1980s/1990s (when even Friedman gave up on targeting monetary aggregates) and finally in 2008 to the present, when both monetarists like Sumner and Keynesians like Paul Krugman backed quantitative easing.

    Inflation targeting, as we have, has its benefits but it also requires the wrong responses to supply-shocks: high inflation during a negative supply-shock is a good thing because its the price mechanism working; very low inflation and even deflation is a good thing in a productivity-shock because it tells people that things are getting cheaper.

    The problem for NGDP targeting, though, is that it has no real political constituency: the right are deflationists, the left are fiscalists… What space is there for people who want to stimulate the economy, but who don’t want to do so via fiscal policy? As Scott Sumner put it once, he’s politically homeless.

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