An asymmetric partisanship effect: House price fluctuations and party positions

Abstract

AbstractPolitical economy arguments on party behaviour usually address parties of the left and the right. This article introduces a novel argument that portrays house price changes as an economic signal that right‐wing parties disproportionately respond to in their programmatic positioning. This asymmetric partisanship effect is driven by homeowners’ importance for right‐wing parties as a core voter group. Increasing house prices improve homeowners’ economic prospects. Right‐wing parties thus have some flexibility to reach out to undecided voters by targeting the centre of the political spectrum. Falling house prices, however, signal worsening economic outlooks for homeowners. Right‐wing parties thus have a strong incentive to send out signals of reassurance and prioritise their core voters. For a sample of Organisation for Economic Cooperation and Development (OECD) countries from 1970 to 2014, the findings support this argument. Right‐wing parties move programmatically leftwards with booming house prices and rightwards when house prices fall, while parties of the left do not respond systematically.