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we're here with Wharton finance professor Eric gilja to talk about one of his research papers which actually
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found a link between voter preferences and the shale boom that's really quite
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timely at this time when the election seems to be very raucous and very interesting so welcome professor thank
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you for having me so tell us about your paper so basically what we try to do is to try to we try to trace out how
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political change occurs in the US electoral system and so the basic idea here is there were kind of two sets of
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hypotheses one is that when voter preferences shift your elected officials change their positions to adapt to the
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new preferences the other is when voter preferences shift they throw out their old elected representative and bring in
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somebody new and so we kind of test each of these two hypotheses within the context of shell discoveries so she'll
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discoveries are interesting place to look at this because when these discoveries occur there's a large change
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in voter preferences to become more conservative and supportive of issues that will help underpin the development
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of shale and so what we see overall is that there's a shift in voting for more
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conservative political candidates Republican candidates and that linked with this rather than existing
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Democratic candidates changing their views to adapt that in fact they they lose their jobs and Republican
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candidates replace them and so in terms of which of these two hypotheses seem to
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dominate it's the case that you basically find a new representative that fits your preferences as opposed to
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Europe right your elected representative adapting their preference towards your views which is kind of interesting when
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we typically think of politicians is kind of saying whatever they need to say to get elected this evidence would
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suggest otherwise so you actually gather data from seven states I understand those are red states some of them are
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read some of them are I guess purple you have Pennsylvania West Virginia North Dakota Arkansas oh cool
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Louisiana Texas and many of these states actually were maybe not always considered red states certainly prior to
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shale discoveries so what are some key takeaways from your paper yeah so I think the key takeaways are this that in
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essence you see that that the mechanism through which the political change occurs is through bringing in new
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representatives and that that we find several other effects in that when you bring in a new representative you get a
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lot of other things with that not just people that help protect shale but also people that may vote differently on
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social issues or other issues that are unrelated to shale and then lastly we kind of have a final result in the paper
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where we show that even the the Democrats that had adjusted their voting record slightly to become more
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conservative still lost their jobs suggesting that maybe they couldn't kind of credibly convey that they had adapted
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to the new preferences of their congressional districts I think what really grabbed me about your paper was
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your major ah-ha finding which was you know when there's a major big economic
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positive economic shock to an area that actually more Democrats become Republicans and can you tell me why that
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is yeah and so this is one interesting aspect of the analysis where we're actually able to obtain access to exit
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poll data and so some people might say well this result was driven by the change changes in electoral makeup
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people moving into the area but in fact through this exit poll data people are asked about their prior political
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preferences and and we actually show that people that tended to be self-identify as historically being more
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liberal shift to become more conservative when these shell discoveries occur and it's not maybe
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surprising when you think about the positions at each of these political parties have tended to have on energy
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development in shale that you have in these areas large increases in income large increases in job growth and that
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basically you know people in these areas adapt their preferences to try to protect
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and ensure that this development continues and now that historically the Republican Party is being more
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consistent with doing that with energy development so I have to ask this question and that is so can you think
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you can handicap the race for us this election year well I think what the results suggest is not necessarily that
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that you know let's say one presidential candidate versus another because the
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results are really at the congressional district level but they suggest that the
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the magnitude of the shift that's occurred that has occurred that's linked
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to shell discoveries are quite large and so in our paper we talked about that in
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aggregate since the beginning of the shale boom 17 Democratic seats have switched to Republican and that that is
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in terms of kind of economic magnitudes that's half of the current Republican
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majority in Congress so to me what it suggests is that if the Democratic Party does not kind of adapt its views or seek
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out these energy voters in a way that they haven't been before that particularly gaining control of the US
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House of Representatives will be challenging for them because you know there's a large asset large component of
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the majority that the Republicans have that exists due to their preference and support of shale development and so
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until that part of the Democratic platform maybe changes or adapts to that aspect of the electoral calculus I think
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it will be challenging on at least the house side for Democrats to make significant headway did that come as a
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surprise to you the magnitude certainly came as a surprise I think I think we expected to see your some shift towards
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Republicans but when you actually trace out the effect on how seats compare that
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to the current majority in Congress what ends we were you end up seeing is that this was quite important for the shift
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in the US House that we've seen over the last 15 years and and this is linked
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with both you oil and shale gas development essentially when we plot this out we see
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one shift occurs from shale gas development happens in the mid 2000s and then and then and then another one that
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occurs later on in 2010 2011 2012 when shale oil development really gets going whether other thing finding said
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surprise to you I think the the last finding that i mentioned that that even those representatives that try to adapt
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in altering their voting records work to be more conservative and so for this we
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look at different interest groups scoring of congressmen and we find is even those that adapt just a little you
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know adapt a little bit are not able to maintain their their seats and so to me that suggests that kind of more
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significant more significant steps would need to be taken to kind of demonstrate
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that they've adapted to their new voter preferences so what are some practical
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implications of your findings yeah i mean i would say in practice what it documents a few things first it shows
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that there are a lot of spillover effects into other policy areas when one policy area changes so shift in energy
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preferences by voters leads to shifts in other areas social issues tax issues that maybe you know you may not have
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expected and i would say that's probably one of the kind of most interesting
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practical aspects of of it so what sets your research apart from prior work in this area yeah i would say prior work by
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and large has not focused on the spillover effects so they've looked at whether a change in voter preferences
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can be observed you can observe something in the data to see whether people actually change their votes one
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way or another we're showing that because of the electoral system that we have that having elected representative
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you kind of you know they have their views and if you you basically kind of rank how
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important your views are and you may end up getting some things in there with that electoral representative that you
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may not have anticipated and then the other aspect which is new is to show that even those who do shift more to the
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right it doesn't seem to matter for voters that much and so it's either a
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question of credibility they can't incredibly shift or a question of the the nature of the party structure that
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even if they do shift the rest of the party which is going to manage you know bills in the seniority system and
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committees may not be conducive to advancing the voter preferences that have now changed in these districts how
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are you going to follow up your research well there are a couple different avenues we're exploring so one avenue
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would be to look at what are the sorts of people that seem more apt to shift their preferences their particular
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characteristics or demographics there another is to look at how this political change spills over and affects firms and
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so you might imagine that firms are working to build political relationships to get favors of some sort or
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preferences of some sort in different aspects of government whether it's regulation or laws and now you have a
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shift that's occurred because of these the energy issue and so you might expect
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that some firms are not going to be more out of favor because they were connected
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to politicians that lost their seats some other firms may be more in favor because now they've they're connected to
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politicians that are in power thank you very much thank you you