Presidential Approval Determinants

This empirical study seeks to identify determinants of the Presidential approval rating in the United States. Instrumental variables estimation reveals that, over the 1960-1997 study period, the Presidential approval rating was positively affected by the 1991 Gulf War (a “popular” war), a perceived genuine effort to reform the Internal Revenue Code (reflected by passage of the Tax Reform Act of 1986), increases in the real (constant dollar) federal personal income tax exemption, and reductions in the average effective federal personal income tax rate. In addition, the Presidential approval rating was negatively impacted by the Vietnam War (an “unpopular”/controversial war), Presidential impeachment proceedings, and large federal budget deficits (relative to the size of the economy).