1. Council for Economic Education 122 East 42 nd Street, Suite 2600 New York, NY 10168 Phone: 212-730-7007 or 1-800-338-1192 Fax: 212-730-1793 www.councilforeconed.org CEE MISSION The mission of the Council for Economic Education is two-fold: To advocate for better and greater school-based economic and personal finance education at the K-12 level; and to educate young people in the United States and around the world, primarily through well prepared teachers, so they may become empowered with economic and financial literacy.

2. E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY Election Economics: http://www.econedlink.org/election- lessons/ L ESSON 13 – P UBLIC C HOICE : E CONOMICS G OES TO W ASHINGTON AND I NTO THE V OTING B OOTH

3. E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY Lesson 3: REVISED “Voters and Elections” This lesson is from “Civics and Government: Focus on Economics,” published by CEE. The lesson discusses the costs and benefits of voting. From analysis, students try to estimate who is more or less likely to vote in an election. Lesson 6: REVISED “Can Election Futures Markets Be More Accurate Than Polls?” This lesson is from “Civics and Government: Focus on Economics,” published by CEE. The lesson introduces students to polls and the Iowa election markets. Lesson 1: NEW “Margin of Error” This new lesson introduces students to the concept of margin of error, which is often reported, but rarely understood. Lesson 8: REVISED “Economic Misery and Presidential Elections” This lesson is from “Civics and Government: Focus on Economics,” published by CEE. The lesson looks at past U.S. elections and finds that economic conditions can play a large role in whether a party retains the presidency. Lesson 13: “Public Choice Goes to Washington and into the Voting Booth” This lesson is from “Focus: High School Economics,” published by CEE. The lesson conducts mock elections in which students learn why people may decide not to vote in an election. L ESSON 13 – P UBLIC C HOICE : E CONOMICS G OES TO W ASHINGTON AND I NTO THE V OTING B OOTH

4. Suggested evening workshop: 4 hours 4:00 to 4:15Introduction 4:15 to 4:45Lesson 3: REVISED “Voters and Elections” 4:45 to 5:30Lesson 6: REVISED “Can Election Futures Markets Be More Accurate Than Polls?” 5:30 to 6:00Dinner Break 6:00 to 6:45Lesson 1: “Margin of Error” 6:45 to 7:20Discussion of Economic Election Issues 7:20 to 7:50Lesson 8: REVISED “Economic Misery and Presidential Elections” 7:50 to 8:00Conclusions L ESSON 13 – P UBLIC C HOICE : E CONOMICS G OES TO W ASHINGTON AND I NTO THE V OTING B OOTH Agendas E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY

5. Suggested day workshop: 6 hours 9:00 to 9:15Introduction 9:15 to 10:00 Lesson 13: “Public Choice Goes to Washington and into the Voting Booth” 10:00 to 10:15 Break 10:15 to 10:45Lesson 3: REVISED “Voters and Elections” 10:45 to 11:30Lesson 6: REVISED “Can Election Futures Markets Be More Accurate Than Polls?” 11:30 to 12:00Lunch 12:00 to 12:45Lesson 1: “Margin of Error” 12:45 to 2:00Discussion of Economic Election Issues 2:00 to 2:45Lesson 8: REVISED “Economic Misery and Presidential Elections” 2:45 to 3:00Conclusions L ESSON 13 – P UBLIC C HOICE : E CONOMICS G OES TO W ASHINGTON AND I NTO THE V OTING B OOTH Agendas E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY

6. LESSON 13: P UBLIC C HOICE : E CONOMICS G OES TO W ASHINGTON AND I NTO THE V OTING B OOTH V ISUALS

7. Group #Option AOption B 1$0$5 2$0$5 3$3$0 4$3$0 5$5$0 Benefits of Electing 1.What are the total benefits if option A is chosen? 2.What are the total benefits if option B is chosen? 3.If each of the five groups has the same number of voters, will option A or option B be chosen? VISUAL 13.2 COSTS AND BENEFITS OF VOTING: ELECTION 1 E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY L ESSON 13 – P UBLIC C HOICE : E CONOMICS G OES TO W ASHINGTON AND I NTO THE V OTING B OOTH

8. Group #Option AOption B 1$0$5 2$0$5 3$3$0 4$3$0 5$5$0 Benefits of Electing – Pay $4 to Vote 1.What are the total benefits if option A is chosen? 2.What are the total benefits if option B is chosen? 3.If each of the five groups has the same number of voters, will option A or option B be chosen? VISUAL 13.2 COSTS AND BENEFITS OF VOTING: ELECTION 2 E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY L ESSON 13 – P UBLIC C HOICE : E CONOMICS G OES TO W ASHINGTON AND I NTO THE V OTING B OOTH

9. Group #Option AOption B 1$0$10 2$0$10 3$3$0 4$3$0 5$5$0 Benefits of Electing 1.What are the total benefits if option A is chosen? 2.What are the total benefits if option B is chosen? 3.If each of the five groups has the same number of voters, will option A or option B be chosen? VISUAL 13.3 COSTS AND BENEFITS OF VOTING: ELECTION 3 E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY L ESSON 13 – P UBLIC C HOICE : E CONOMICS G OES TO W ASHINGTON AND I NTO THE V OTING B OOTH

10. L ESSON 3: V OTERS AND E LECTIONS V ISUALS

11. V ISUAL 3.1 T HE C OSTS OF V OTING 1. Dollar costs. No dollar costs may be imposed by fees or taxation. Amendment 24 to the U.S. Constitution rules out dollar costs: Section 1. The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President or Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any state by reason of failure to pay any poll tax or other tax. 2. Other costs. While the Constitution prohibits monetary charges, this does not mean that voting is entirely without costs. Voters will incur opportunity costs. The opportunity cost of voting is what a voter gives up in choosing to vote. Here are some possible opportunity costs: Time taken to register Time to find a voting location, or to vote via absentee ballot. Time taken to vote, which may also mean lost wages for voters who miss work; or babysitting or transportation costs. Time needed to investigate candidates and issues. L ESSON 3 – V OTERS AND E LECTIONS E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY

12. Reason All18-24 10. Inconvenient Polling Place 9. Transportation Problems 8. Forgot 7. Don’t Know/Refused to Answer 6. Registration Problems 5. Out of Town 4. Didn’t Like the Candidates 3. Not Interested 2. Illness or Disability 1. Too Busy In 2008, citizens aged 18-24 made up 12.6% of the voting age population, but only 9.3% of the voters. L ESSON 3 – V OTERS AND E LECTIONS V ISUAL 3.2 T OP T EN R EASONS R EGISTERED V OTERS G AVE FOR N OT V OTING IN 2008 E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY 2.7% 2.8% 7.0% 8.0% 8.8% 12.9% 13.4% 14.9% 17.8% 2.8% 2.4% 4.5% 11.2% 9.0% 14.2% 8.0% 12.1% 3.2% 21.0%

13. Men or Women White or Black or Asian Naturalized Citizen or Native Born Married or Never Married Separated or Divorced Low Income or High Income Employed or Unemployed H.S. Degree or Bachelor’s Degree Minnesotan or Floridian or Hawaiian Veteran or Non-Veteran Renter or Homeowner Young (18-24) or Old (45-64) Women 65.7 to 61.5 White 66.1 - Black 64.7 - Asian 47.6 Native 64.4 to 54 Married 69.9 to 53.5 Divorced 59 to 53.5 High Income 91.8 to 51.9 Employed 65.9 to 54.7 Bachelor’s Degree 77 to 54.9 MN. 75 - FL. 63.8 - HI. 51.8 Veteran 70.9 to 62.8 Homeowner 67.8 to 51.6 Old 69 to 49 V ISUAL 3.4 W HO V OTES M ORE ? Of all citizens, who voted most, percentage-wise, in the 2008 presidential election? L ESSON 3 – V OTERS AND E LECTIONS E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY

14. D EBRIEFING Who do you think politicians will pay more attention to during an election? What can be done to lower the opportunity cost of voting so more people can vote? Pay people to vote… Mandatory voting…. Advertising campaign by government… L ESSON 3 – V OTERS AND E LECTIONS E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY

15. L ESSON 6: C AN E LECTION F UTURES M ARKETS BE M ORE A CCURATE T HAN P OLLS ? V ISUALS

16. Firm When Conducted ObamaMcCain Undecided Obama Lead Election Result 11/452.9 (53.7)* 45.7 (46.3) -----7.3 (7.4) Harris (Online) 10/30-11/3524408 Fox News11/1-2504357 Gallup10/31-11/25544011 Zogby10/31-11/35443311 GWU11/2-3504802 NBC/WSJ11/1-2514328 ABC/WP10/31-11/3534429 CBS/NYT10/31-11/2514259 CNN/USA10/30-11/1534617 IOWA EM11/353.5546.45------7.1 LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS? VISUAL 6.1 COMPARING POLLS AND MARKETS E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY * The number in parenthesis is the share of vote between two candidates, which is comparable to the Iowa EM vote share payoff.

17. Through all the twists and turn of the primary campaign and the final campaign, the Iowa Electronic Markets consistently picked Barack Obama as the leader. As illustrated in the figure below, from June 2006 until November 2008, Barack Obama led by similar margins to the final election outcome. VISUAL 6.3 RESULTS FOR THE PRESIDENTIAL ELECTION E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?

18. THIS YEAR’S ELECCTION E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?

19. L ESSON 1: M ARGIN OF E RROR V ISUALS

20. E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS? Each group will get a bag. Do not look inside. Each bag contains white and red (or maybe green) chips Each group should have a pollster and a record keeper. When instructed, the groups will “poll” by having the pollster draw a chip. The record keeper will record its color. The chip is then put back into the bag. We need 9 groups

21. E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS? Margin of error is: 1 / √n for a 95% confidence level (This is extremely simplified.) For our sample of 16, the margin of error is 25%. For your group, find a confidence interval (your estimate plus/minus the margin of error). Margin of Error

22. E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS? 65% is actual value How many polls resulted in that value being within the confidence interval! Look in bag

23. L ESSON 1 – M ARGIN OF E RROR V ISUAL 1.1 E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY Number polled from a large population Margin of Error with a 95% Confidence Level 1448.3% 4005.0% 1,0003.2% 2,0002.2% 3,0001.8% 4,0001.6%

24. ISSUES

25. Lesson 11: How Should Governments Structure the Tax System?

26. LESSON 8: ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS VISUALS

27. A Real GDP per capita growth rule: The incumbent party usually wins if… The growth rate of Real GDP per capita is greater than or equal to 2.5% during the year of the election. A Misery Index rule: The incumbent party usually wins if… The Misery Index has not increased from the year prior to the election. VISUAL 8.3 SOME ECONOMIC RULES THAT WORK WELL E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS

28. VISUAL FOR STEP 16 – Predicting the Next Election E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS YearGrowth in Real GDP per Capita Unempl oyment Rate Inflatio n Rate Misery Index Growth Rule Misery Index Rule Candida tes Incumb ent Party Wins or Loses? 2009-4.39.3-0.48.9 20102.29.61.611.2 20110.98.93.212.1 2012??? Obama vs. Romney

29. VISUAL FOR STEP 16 – Predicting the Next Election E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 8 – ECONOMIC MISERY AND PRESIDENTIAL ELECTIONS YearGrowth in Real GDP per Capita Unempl oyment Rate Inflatio n Rate Misery Index Growth Rule Misery Index Rule Candida tes Incumb ent Party Wins or Loses? 2009-4.39.3-0.48.9 20102.29.61.611.2 20110.98.93.212.1 2012 May 2012 Data ??? 1.1 ??? 8.2 ??? 1.7 ??? 9.9Romney Win Obama Win Obama vs. Romney???

30. Spring 2008

31. Spring 2012