Credible Sources and Sophisticated Voters: When Does New Information Induce Economic Voting?∗

When does new economic information cause voters to re-evaluate the government’s competence, and ultimately vote economically? Since politically-relevant information is often conveyed by actors with incentives to influence voter perceptions, the credibility of information sources can vary significantly. This paper randomly varies whether voters receive an aggregate unemployment forecast from the central bank, government or main opposition party using a survey experiment in Denmark with unique access to detailed panel and administrative data. We find that politically sophisticated voters discern differences in institutional credibility and the political cost of the signal, and update their unemployment expectations accordingly. Despite failing to differentiate political costs, unsophisticated voters still substantially update their expectations. However, after experimentally altering unemployment expectations, only sophisticated voters intend to engage in substantial prospective economic voting. Consequently, providing economic information supports economic voting to the extent that it is credible and reaches sophisticated voters.