Elections

Tag: Elections

Tuesday’s Big Winner — Nate Silver

Going into yesterday’s election, the prediction markets had President as a 2:1 favorite to win a second term, and the New York Times‘ Nate Silver put the odds at more like 9:1.  Silver is rather up front about his methodology (though it does contain some “secret sauce”), and he posts predictions for every single state in the union.  Indeed, he predicted a 332 electoral votes, with Florida going to Obama with a raz0r-thin margin — Silver gave the president a 50.3% chance of carrying the state.

As it stands, President Obama has secured 303 electoral votes, with the allocation of the 29 Florida votes too close to call. As of this writing, the count has it every-so-slightly in Obama’s favor.

If it goes Obama’s way, Silver will have nailed the election; if it goes Romeny’s way, InTrade will have nailed the election.

Remarkable.

There was some controversy about Silver’s methodology, and some conservative commentators thought he was telling the Democrats what they wanted to hear.  Well, the proof of the puddin is in the eating, as the saying goes (or would go if it hadn’t been hopelessly garbled).

See here for a whole lot of other election predictions that weren’t as good as Mr. Silver’s.

UPDATE: Florida goes to Obama / Silver.  Bow down.

What’s the Matter with Knicks Fans? And Guys Named Jonathan?

Thomas Frank famously asked What’s the Matter with Kansas?, where he argues that people in Kansas tend to vote against their economic interests, that “People getting their fundamental interests wrong is what American political life is all about.”  To wit, he wonders why people in a relatively poor state like Kansas overwhelmingly vote Republican year after year.

Columbia’s Andrew Gelman has a simple explanation: They don’t.

In a series of papers culminating with Red State, Blue State, Rich State, Poor State: Why Americans Vote the Way They Do, Gelman shows that there is a direct relationship between income and voting Republican — higher incomes, higher Republican vote shares — and this relationship holds in both Red and Blue states.

Lower-income Americans don’t, in general, vote Republican — and, where they do, richer voters go Republican even more so…(16)  In 2004, Bush received 62% support among voters making over $200,000, compared to only 36% from voters making less than $15,000. (9)

Here are some of Gelman’s numbers from the 2008 Obama landslide.

This leaves the question, why do Democrats tend to win richer states (states with higher median family incomes), while poorer states go to Republican candidates? The answer, Gelman contents, boils down to cultural differences mattering more in Blue states than Red states.  In short, high-income voters overwhelmingly vote Republican in Red States, whereas the difference isn’t so significant in the Blue states.

It isn’t as simple as that, of course.  Academics and other professional are at the higher end of the income scale, and they overwhelmingly vote Democrat, so that goes against the grain.  But, Gelman acknowledges as much, and he parses the data every which way he can to paint a picture of what’s going on.

You can learn a lot about American politics even by flipping through his work and checking out some of his data plots. Voters split along other margins than income, but income is a big one.

So what are some of these other margins?   Continue reading What’s the Matter with Knicks Fans? And Guys Named Jonathan?

Gordon Tullock on Voting

As we wind down 3+ years of the presidential campaign, we stop to talk about the basic economics of voting.  And if you’ve ever heard an economist talk about voting, you’ve probably heard of Gordon Tullock.

Here’s Professor Tullock in epic curmudgeon mode giving a three-minute pep talk for tomorrow’s election.  He explains that he doesn’t vote because the chance that his vote will “matter” — in the sense that it is pivotal — is zero.  In other words, he doesn’t vote because the likelihood of his vote being decisive is essentially zero.  If that one guy who always sleeps through my classes also happens to sleep through the election, that one abstention will not affect who wins on Tuesday.

Of course, this prompts the response that starts something like “If everyone thought that way…”, to which Tullock responds:

“Suppose nobody voted?…. If nobody else voted I would vote… And the fewer other people vote, the more  likely I am to vote.”

Again, here’s the Tullock video.

You think we’re kidding?  Here’s more in the same vein from the Freakonomics site.

 

Presidential Candidates and the Economy

Tonight (Tuesday, 10/30) Amnesty International is hosting a panel of Lawrence professors talking about the presidential candidates at 7 p.m. in the Cinema.  In addition to human rights issues, the panel will address the potential economic implications of the upcoming elections.  In preparation for the panel, I took a look for some general sentiment from the economics profession.  Here are a few choice items:

My first-order reaction was that it doesn’t matter much one way or the other who gets put into office in terms of the broad macro implications, but that is possibly because my macro expertise isn’t what it might be.  It’s pretty clear that November’s winner will have a pretty pronounced influence on certain aspects of administrative regulation, with possibly significant implications for the energy and health care sectors.

UPDATE:  Here are some links to works discussed this evening:

Andrew Gelman, Red State, Blue State, Rich State, Poor State, Why Americans Vote the Way They Do. (Article in Quarterly Journal of Political Science and link to the Book).

Thomas Frank, What’s the Matter with Kansas?

InTrade Market Manipulation Fail

Though the recent presidential election polls show a virtual dead heat, the prediction markets (particularly InTrade) have consistently shown President Obama with a decisive 3:2 advantage or better.  The 3:2 advantage for Obama amounts to paying $0.60 to win $1, which is (loosely) interpreted as a 60% chance of winning — though it’s not really a probability. In contrast, you can buy Romney shares at around $0.40 to win $1.

Yesterday, however, some heavy money came flooding in on Romney, temporarily pushing the Romeny price / odds closer to $0.50.  This spike was short lived, however, and the price soon settled back down to the $0.40 range.

Was it an attempt to manipulate the market? And if so, who would do such a thing? Derek Thompson at The Atlantic talks with prediction-market guru Justin Wolfers:

At around 9:57am this morning, I noticed something funny happening on InTrade: Obama’s stock was tanking, and this was happening in the absence of any concrete political news… Romney’s stock shot up from 41 to 48 in a matter of minutes (suggesting that his chances of winning the election had risen from 41% to 48%).

Notice though that the effect disappeared very quickly. The Obama Flash Crash disappeared nearly as quickly as it appeared.

Two conclusions follow. First, you can manipulate prediction markets fairly easily. But second, you won’t get much bang for your buck.

This made news in about a dozen wonky blogs, so it appears that prediction markets are here to stay.

Those of you who don’t know what I’m talking about might start by checking our previous posts on prediction markets for some background.

I should mention that since that time the Romney price / odds have been rising a bit, to about $0.45;  I knew I should have bought at $0.25.  I could have cashed in.

Incidentally, InTrade has a state-by-state breakdown based on its current market prices, showing Obama with a razor-thin lead.  At current prices (Oct 24 at noon), if Wisconsin flipped, it would be an electoral college tie.  Zoinks.

Some argue that the prediction markets simply follow the polls.  I guess we’ll see.

Former?

The Chicago Reader has a short piece on my brother, who wrangled the Mayorship from the incumbent in the Champaign election yesterday.  And wrangled is certainly the right word, as he has been campaigning tirelessly for the past six months.

Former Rocker Don Gerard Elected Mayor of Champaign

Don Gerard, a longtime fixture in Champaign-Urbana’s indie-rock scene, was elected mayor of Champaign yesterday. I haven’t seen or spoken to him in many years, but I remember Gerard, who played drums and bass in countless bands beginning in the mid-80s, as enthusiastic, energetic, and expertly sarcastic. His aesthetic sensibilities leaned toward punk and roots music, but his best-known group, the Moon Seven Times, was a 4AD-worshiping, goth-leaning outfit. He also played in the Farmboys, a band fronted by recording engineer Adam Schmitt; the Bowery Boys, fronted by Chicagoan Leroy Bach (Uptighty, Five Style, Wilco); and Steve Pride & His Blood Kin, which also included Jay Bennett. For a time he lived in the Champaign rock palace known as the Ten Shitty Guy House, which at one time or another housed members of the Didjits and Titanic Love Affair.

I must say, this is a bit surreal.