VALUING PEACE: THE EFFECTS OF FINANCIAL MARKET EXPOSURE ON VOTES AND POLITICAL ATTITUDES

Can participation in financial markets lead individuals to reevaluate the costs of conflict, change their political attitudes, and even their votes? Prior to the 2015 Israeli elections, we randomly assigned Palestinian and Israeli financial assets to likely voters and incentivized them to actively t...

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Bibliographic Details
Published in:Econometrica 2019-09, Vol.87 (5), p.1561-1588
Main Authors: Jha, Saumitra, Shayo, Moses
Format: Article
Language:English
Subjects:
Assets
Conflict
Elections
field experiment
Financial market
financial markets
Incentives
Markets
Peace
Peace negotiations
Political attitudes
Stocks
Voters
Voting
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Summary:Can participation in financial markets lead individuals to reevaluate the costs of conflict, change their political attitudes, and even their votes? Prior to the 2015 Israeli elections, we randomly assigned Palestinian and Israeli financial assets to likely voters and incentivized them to actively trade for up to 7 weeks. No political messages or nonfinancial information were included. The treatment systematically shifted vote choices toward parties more supportive of the peace process. This effect is not due to a direct material incentive to vote a particular way. Rather, the treatment reduces opposition to concessions for peace and changes awareness of the broader economic risks of conflict. While participants who were assigned Palestinian assets are more likely to associate their assets' performance with peace, they are less engaged in the experiment. Combined with the superior performance of Israeli stocks during the study period, the ultimate effects of Israeli and Palestinian assets are similar.
ISSN:0012-9682
1468-0262
DOI:10.3982/ECTA16385