Luxury Goods Voting and Multi-Party Competition

In this paper we investigate how parties’ luxury goods profiles affect people’s vote choice and how this is conditioned by their economic perceptions. A growing literature has investigated the empirical regularity that parties of the Left tend to lose more votes in economic downturns. In a recent analysis Kayser (2016) in a “tournament of theories” provides evidence that this regularity can be best explained by a mechanism of luxury goods voting – when the economy is bad people dislike luxury goods such as funding for the arts or measures for environmental protection and parties of the Left are more associated with these policies. Here, we build on Kayser’s work and expand the theoretical argument as well as the empirical analysis. We argue that, first, parties vary in their perceived luxury goods profile and that this is not only the case for left-wing parties. Second, parties’ perceived position as well as their issue emphasis matters. Third, the structure of party competition is crucial in order to understand the luxury goods mechanism, as with increasing politicization of the economic dimension of party competition, their luxury goods positions matter less. We combine insights from two experiments, a new survey and existing election studies and demonstrate that a luxury goods mechanism is indeed crucial to understanding voting behavior. Moreover, it is conditioned by parties’ strategic behavior as well as the broader structure of party competition.