Pons, VincentO'Connor, Taryn Marie2024-12-0120242024-11-262024O'Connor, Taryn Marie. 2024. Pricing in the Polls: How Expected Election Outcomes Drive Asset Price Reactions in Advanced and Emerging Market Economies. Bachelor's thesis, Harvard University Engineering and Applied Sciences.31144230https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37379996How do prior expectations influence the reaction in equity markets to an election result? In this thesis, I explore this question utilizing a dataset of 92 elections from 1988-2020 and election polls that were released ahead of their final rounds. Through the use of event studies, I find that in elections that are expected to be close prior to the vote taking place left-wing victories generate -1.753 percentage points of abnormal returns in response to election outcomes, compared to a -1.073 percentage point drop when only elections with close outcomes are considered. Additionally, there is no significant market reaction to right-wing victories in the same indices, potentially signaling that market actors are placing too much weight on a market-friendly outcome in their priors. Lastly, this analysis shows that emerging market nations have reactions of higher magnitude to election outcomes compared to advanced economies.application/pdfenEconomicsThesis or Dissertation2024-12-01