Replication Data for: The Measurement of Real-Time Perceptions of Financial Stress: Implications for Political Science

Responding to financial market disruptions is a defining challenge for policymakers and a central topic of political research. Yet established measures of financial conditions have significant shortcomings. Binary crisis variables limit our ability to explore non-linear relationships and the political effects of rapidly changing conditions. Continuous indicators have their own flaws in operationalization and reproducability. We create a continuous measure of real-time perceived stress using a kernel principal component analysis (KPCA) of Economist monthly country reports. We demonstrate the usefulness of our measure by showing that it more accurately captures the effect of financial market stress levels on electoral volatility. We also show how KPCA can be used to summarize efficiently large quantities of texts into cross-sectional time-series variables.