I've received a lot of response about last month's post describing the strong correlation between the appreciation in the value of homes and voter behavior in the last election (which we will henceforth call "The Sailer Effect", after the conservative blogger who independently discovered the same phenomenum last December), thanks to Mickey Kaus (with some assistance from James Taranto, who helpfully pointed out to the world that "correllation" is not only not causation, it's not correlation either, and Mark Kleiman).

There seems to be some confusion about what the housing figures cited in my chart reflect. The numbers, based on the Housing Price Index put out by the Office of Federal Housing Enterprise Oversight, measure the amount single-family homes have appreciated in value, not the average price of a home. If my reading of the methodology used is correct, the numbers I cited were based on homes that existed in 1980, and have been sold at least twice since then. Also, multi-unit properties, such as condominiums and duplexes (duplexi?), are not counted in the survey.

The explanations I've seen for the Sailer Effect are quite interesting. They include population density, immigration levels, higher birthrates in Red States, the preponderence of college towns and dual-income families in Blue States, and the positive effect rigorous zoning, labor, and planning laws have in creating wealth for homeowners. One commenter even linked the correlation to abortion.

There is probably truth to each of the explanations, but what really intrigued me about the Sailer Effect was that it was a long-term phenomenum. Both 1980 and 2004 featured Republican victories across the board, but if you look at the states that Carter either won that year or came close, for the most part you are seeing a different collection of states than those that went for Kerry last year. Even though Carter lost big, he still carried two states (Georgia and West Virginia) that went for Bush last time, and ran relatively well in most of the South. With the exception of Florida, every Southern state is in the lower half of the chart. On the other hand, a number of states that Reagan carried easily that year, such as California, Michigan and Illinois, as well as small states like New Hampshire, are now in the Blue column. And each of those states is in the top half; in fact, generally speaking, the greater the increase, the larger Kerry's margin was (and vice versa).

Moreover, the shifting political allegiances of West Virginia and New Hampshire at the Presidential level call into question the view that it is liberal policies that cause housing scarcity, which in turn drives up home values. West Virginia, although it has become an increasingly safe Red State, has been controlled at the state level by Democrats for the most part since the 1930's, and it has a well-deserved reputation for having an activist, pro-labor government. New Hampshire, on the other hand, remains a Republican state down-ticket, and its policies at the state level are notoriously conservative.

In addition, while most of the commenters assume that the rate of growth in housing prices is a bad thing, since many people are priced out of the market, it's pure nirvana if you happen to own a home. People who set up roots in a particular state by buying (and keeping) a home gain a nice little nest egg, and what the Sailer Effect shows is that homeowners who live in states that favor liberal Presidential candidates make more money out of the sale of their homes than voters in states that back conservatives. I still have not seen an explanation as to why this form of wealth-creation should be more conducive to creating a Democratic base, or why people who lack access to that in a particular state would be more likely to vote Republican.

In the meantime, here's a related chart, showing a noticeable but weaker correlation between bankruptcy rates and the state's 2004 preference. More to follow....