Frustration and voting behavior : evidence from stock market data

We document that a huge frustration shock, clearly unrelated to government's actions, was perceived to lead to substantial punishment at the polls months later. In particular, we provide evidence that Brazil's 7-1 humiliating defeat to Germany in the 2014 World Cup was perceived by financial market participants as a political shock against the incumbent president. To do so, we explore an empirical strategy that allows us to extract daily political news content from stock market data. Among the many events that affected the convoluted 2014 presidential election, the 7-1 defeat to Germany was among those perceived to have high political impact. We propose an explanation whereby this huge frustration shock triggered a transfer of domains that led Brazilians to update their beliefs regarding government's poor performance.