Table   9.9   gives data on quadrennial presidential elections in the United States from 1916 to   $2004 .^{*}$  
a. Using the data given in Table 9.9, develop a suitable model to predict the Democratic share of the two-party presidential vote.
b. How would you use this model to predict the outcome of a presidential election?>  I   Indicator variable ( 1 if there is a Democratic incumbert at the time of the election and   -1   if there is a Republican incumbent).
  N   Number of quar lers in the first 15 quarters of the administration in which the growth rate of real per capita GDP is greater than   $3.2 \%$  . A Absolute yalue of the growth rate of the GDP deflator in the first 15 ouarlers of the administation.>c. Chatterjee et al. suggested considering the following model as a trial model to predict presidential elections:
\[
$V=\beta_{0}+\beta_{1} I+\beta_{2} D+\beta_{3} W+\beta_{4}(G I)+\beta_{5} P+\beta_{6} N+u$
\]
Estimate this model and comment on the results in relation to the results of the model you have chosen.

Table 9.9 gives data on quadrennial presidential elections in the United States from 1916 to 2004 . a. Using the data given in Table 9.9, develop a suitable model to predict the Democratic share of the two-party presidential vote. b. How would you use this model to predict the outcome of a presidential election?
TABLE 9.9 U.S. Presidential Elections, 1916-2004 \begin{tabular}{clllrcrrr} \hline Obs. & Year & \multicolumn{1}{c}{$\boldsymbol{V}$} & $\boldsymbol{W}$ & $\boldsymbol{D}$ & $\boldsymbol{G}$ & $\boldsymbol{I}$ & $\boldsymbol{N}$ & $\boldsymbol{P}$ \\ 1 & 1916 & 0.5168 & 0 & 1 & 2.229 & 1 & 3 & 4.252 \\ 2 & 1920 & 0.3612 & 1 & 0 & -11.46 & 1 & 5 & 16.535 \\ 3 & 1924 & 0.4176 & 0 & -1 & -3.872 & -1 & 10 & 5.161 \\ 4 & 1928 & 0.4118 & 0 & 0 & 4.623 & -1 & 7 & 0.183 \\ 5 & 1932 & 0.5916 & 0 & -1 & -14.9 & -1 & 4 & 7.069 \\ 6 & 1936 & 0.6246 & 0 & 1 & 11.921 & 1 & 9 & 2.362 \\ 7 & 1940 & 0.55 & 0 & 1 & 3.708 & 1 & 8 & 0.028 \\ 8 & 1944 & 0.5377 & 1 & 1 & 4.119 & 1 & 14 & 5.678 \\ 9 & 1948 & 0.5237 & 1 & 1 & 1.849 & 1 & 5 & 8.722 \\ 10 & 1952 & 0.446 & 0 & 0 & 0.627 & 1 & 6 & 2.288 \\ 11 & 1956 & 0.4224 & 0 & -1 & -1.527 & -1 & 5 & 1.936 \\ 12 & 1960 & 0.5009 & 0 & 0 & 0.114 & -1 & 5 & 1.932 \\ 13 & 1964 & 0.6134 & 0 & 1 & 5.054 & 1 & 10 & 1.247 \\ 14 & 1968 & 0.496 & 0 & 0 & 4.836 & 1 & 7 & 3.215 \\ 15 & 1972 & 0.3821 & 0 & -1 & 6.278 & -1 & 4 & 4.766 \\ 16 & 1976 & 0.5105 & 0 & 0 & 3.663 & -1 & 4 & 7.657 \\ 17 & 1980 & 0.447 & 0 & 1 & -3.789 & 1 & 5 & 8.093 \\ 18 & 1984 & 0.4083 & 0 & -1 & 5.387 & -1 & 7 & 5.403 \\ 19 & 1988 & 0.461 & 0 & 0 & 2.068 & -1 & 6 & 3.272 \\ 20 & 1992 & 0.5345 & 0 & -1 & 2.293 & -1 & 1 & 3.692 \\ 21 & 1996 & 0.5474 & 0 & 1 & 2.918 & 1 & 3 & 2.268 \\ 22 & 2000 & 0.50265 & 0 & 0 & 1.219 & 1 & 8 & 1.605 \\ 23 & 2004 & 0.51233 & 0 & 1 & 2.69 & -1 & 1 & 2.325 \\ \hline \end{tabular} Notes: Year Election year $V$ Incumbert share of the two-party presidential vote. W Indicator variable (1 for the elections of 1920, 1944, and 1948, and 0 otherwise). $D$ Indicator variable ( 1 if a Democratic incumbent is running for election, -1 if a Republican incumbent is running for election, and 0 otherwise). $G$ Growth rate of real per capita GDP in the first three quarters of the election year. $I$ Indicator variable ( 1 if there is a Democratic incumbent at the time of the election and -1 if there is a Republican incumbent). $N$ Number of quar ters in the first 15 quar ters of the administration in which the growth rate of real per capita GDP is greater than $3.2 \%$. $P \quad$ Absolute value of the growth rate of the GDP deflator in the first 15 quar ters of the administration.
c. Chatterjee et al. suggested considering the following model as a trial model to predict presidential elections: \[ V=\beta_{0}+\beta_{1} I+\beta_{2} D+\beta_{3} W+\beta_{4}(G I)+\beta_{5} P+\beta_{6} N+u \] Estimate this model and comment on the results in relation to the results of the model you have chosen.