Could the result of the Brexit vote be explained by changes in economic variables?: An analysis of economic variables by NUTS 2 regions

Abstract

On June 23rd 2016, the British electorate voted to leave the European Union in a referendum on the United Kingdom’s membership of the EU, nicknamed Brexit for a British exit. I analysed economic variables by NUTS 2 regions in a quest to answer the question “Could the result of the Brexit vote be explained by changes in economic variables?”. Using OLS regressions on regional economic variables, I found that variables like development of unemployment during 2006 to 2015, disposable income of private households during 2004 to 2013 and GDP per capita from 2006 to 2015 certainly had a varying effect on the share of votes for leaving the EU in NUTS 2 regions. Growth of disposable income had a significant effect on share of votes cast in support of leaving the EU. Development of GDP per capita in NUTS 2 regions had a slight effect, while GDP per capita in 2015 had a significant effect. However, the development of the unemployment rate had only a minor effect. Furthermore, demographic and social variables like the age of voters and their level of education were influential in determining the share of votes cast for leaving the EU. Also, geographical factors and national identity had a substantial effect on voters’ choices.