This paper studies how presidential popularity and changes in macroeconomic situations are interrelated in South Korea. For presidential popularity, we use the presidential job approval rates of the past four presidents, collected monthly by Research & Research (a Korean opinion poll survey company). The covered period is between March 1993 and February 2013. We are particularly interested in whether voters are prospective (forward looking) or retrospective (backward looking) in evaluating president’s job performance.
Eight macroeconomic variables were chosen to explain the approval rates: the unemployment rate, the inflation rate, year-by year variations in export, an index of industrial production, the KOSPI index, business survey indices,
consumer sentiment indices, and the composite leading indicator. Among them, the unemployment rate, the inflation rate, year-by year variations in export, an index of industrial production, and the KOSPI index are variables
measuring past or current economic performance, whereas business survey indices, consumer sentiment indices, and the composite leading indicator are those reflecting optimism for future economic situations.
In addition to the variables capturing changes in macroeconomic situations, we also construct dummy variables for non-economic events, using the events that five major Korean daily newspapers commonly list as ‘the most
important ten events of the year.’ We include both economic and non-economic variables in our regressions.
Our analysis shows that positive signals from the export variation rate and the composite leading indicator increase presidential popularity. This might imply that voters in South Korea are both retrospective and prospective; they
look at not only the past and the present but also the future.