The neighbourhood effect in economic voting: the association between local unemployment figures and national economic perceptions and incumbent voting in Belgium, 2009–2019

While economic voting theory assumes that voters respond to economic conditions, critics have argued that most voters lack an adequate understanding of key national economic indicators. In this paper, we investigate the occurrence of a neighbourhood effect, where citizens can observe unemployment levels in their own local communities. Using both official statistics and survey data of three recent election studies in Belgium, we assess whether local unemployment levels are associated with the assessment of the national economy, and incumbent voting. While the results show that the local unemployment level is strongly associated with the assessment of the national economy, results regarding a direct association with supporting incumbent political parties are mixed. We argue that the neighbourhood effect is an important mechanism in economic voting, as citizens react to a neighbourhood effect in their assessment of the state of the national economy.