Saturday, 13 March 2010

The poll that really counts? Punters still not favouring Abbott-led Coalition

Possum Comitatus chart from Pollytics 12 March 2010

Betting markets may not hold all the answers but they have been uncannily predictive of real world political wins in more than a few local, state and national elections in the USA, Britain and Australia over the last decade according to the Political Forecasting Unit/Betting Research Unit at Nottingham Trent University U.K.

While in America; Justin Wolfers, a Stanford University finance professor, came to a similar conclusion in a study that examined the accuracy of bookmakers predicting the outcome of Australia's federal election.
In a survey of wagering on Australia's 2001 federal election, Wolfers found that the candidate favored by the country's largest bookmaker, Centrebet, prevailed in 43 of 47 contests.

Wolfers & Leigh in the Australian Journal of Political Science Vol 37:
Centrebet also offered odds on the outcomes in 47 electorates. Figure 6 focuses on the betting favourite in each race, plotting the probability of victory implicit in these odds against their two-party-preferred vote share. In 43 of 47 cases, the betting favourite won the election. Indeed, all 13 ALP candidates who were fancied in the betting won, while the four losers comprised two National Party MPs and two Liberals. Moreover, candidates who were more highly fancied also won a greater share of votes. Given that most marginal seats were in this sample, the fact that the market correctly selected so many tight races is quite extraordinary.

Possum gives us the graph above this week based on the Centerbet, IASbet, Sportingbet and Betfair markets which (only around 4-6 months out from writs being issued) must give the Coalition pause for thought concerning both Tony Abbott and election promises.

Time for all candidates to become acquainted with the betting odds?

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