THE SHORT-TERM EFFECT OF ELECTION POLLS ON FOREIGN EXCHANGE RATES: THE 1988 CANCDIAN FEDERAL ELECTION

Polls do not simply measure public opinion; they also providevital information that the public can use to form opinions andto make decisions. Using multiple regression analysis, the authorsfound that published polls had a powerful impact on the valueof the Canadian dollar during the 1988 Canadian federal election.This appears to have been due to the unprecedented importanceof economic issues in the federal campaign, the distinctivepositions taken by the major political parties with respectto the U.S.-Canadian Free Trade Agreement, and to the proliferationof "horse-race" polls in the media. These results have implicationsfor understanding the behavior of other elite groups, such asfinancial contributors and volunteer campaign workers, who mayalso use published horse-race polls to handicap election outcomes.