Who are you going to believe?
Case 1: According to the latest polls, “Gov. Walker Holds Slim Lead in Wisconsin, But with only one day to go the recall election appears far from decided…. Two new polls, released Sunday, have the governor out in front by a handful of percentage points, although in both surveys his lead is within the margin of error.”
Case 2: According to the “prediction market,” InTrade: Wisconsin Gov. Scott Walker to win the 5 June 2012 recall election 93.2% CHANCE.
I’ll have much more to say about prediction markets later this summer as we head into the general election, but suffice it to say that these markets tend to be more accurate than pollsters at predicting elections. From a Journal of Economic Perspectives piece by Justin Wolfers:
In the political domain, Berg, Forsythe, Nelson and Reitz (2001) summarize the evidence from the Iowa Electronic Markets, documenting that the market has both yielded very accurate predictions and also outperformed large scale polling organizations… (and) the accuracy of the market prediction improves as information is revealed and absorbed as the election draws closer.
That is taken a bit out of context and is comparing national polls to certain political markets, but if it was my money, I’d bet on the market. That is, right now the polls are running between a coin toss (50-50) and a slight advantage for Walker, perhaps 3:2. In contrast, the prediction market has Walker at about a 15:1 favorite at this point. So, to put this in perspective, suppose someone is tossing a coin and you believe it to be a fair coin. You can lay a $9 on heads to win $10 or $1 on tails to win $10. Which side would you bet?
In calling this one early, it would seem the credibility of prediction markets on Briggs 2nd is now riding in the balance.
I have no idea why this is 90%+, but that’s the whole point of the market — bringing together disparate views.
If I had money down, I’d definitely put it on Barrett with those kinds of odds. But, if I simply had to pick a winner, I’d have to say Walker….
On the other hand, I’ve never seen so many people registering and voting, so who knows what that means?
I’d make that bet for Barrett for two reasons.
1. The Democratic ground game is historically much better than that of the Republicans. Moreover, because of the lack of elections in other states and increased union stake, I think we can expect a bit more of a “get out the vote” drive tomorrow than most election days.
2. The polling that everyone seems to be relying on is based on likely voters. This is skewed because that makes 2010 (a year of high Republican turnout) disproportionately represented.
Walker will still probably win, but the prediction markets are relying far too heavily on polling.
…If only intrade took American credit cards.