Competing Approaches to Forecasting Elections: Economic Models, Opinion Polling and Prediction Markets
AbstractWe review the efficacy of three approaches to forecasting elections: econometric models that project outcomes on the basis of the state of the economy; public opinion polls; and election betting (prediction markets). We assess the efficacy of each in light of the 2004 Australian election. This election is particularly interesting both because of innovations in each forecasting technology, and also because the increased majority achieved by the Coalition surprised most pundits. While the evidence for economic voting has historically been weak for Australia, the 2004 election suggests an increasingly important role for these models. The performance of polls was quite uneven, and predictions both across pollsters, and through time, vary too much to be particularly useful. Betting markets provide an interesting contrast, and a slew of data from various betting agencies suggests a more reasonable degree of volatility, and useful forecasting performance both throughout the election cycle and across individual electorates.
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Bibliographic InfoPaper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 502.
Length: 32 pages
Date of creation: Nov 2005
Date of revision:
Voting; elections; prediction markets; opinion polling; macroeconomic voting;
Other versions of this item:
- Andrew Leigh & Justin Wolfers, 2006. "Competing Approaches to Forecasting Elections: Economic Models, Opinion Polling and Prediction Markets," The Economic Record, The Economic Society of Australia, vol. 82(258), pages 325-340, 09.
- Leigh, Andrew & Wolfers, Justin, 2006. "Competing Approaches to Forecasting Elections: Economic Models, Opinion Polling and Prediction Markets," IZA Discussion Papers 1972, Institute for the Study of Labor (IZA).
- Leigh, Andrew & Wolfers, Justin, 2006. "Competing Approaches to Forecasting Elections: Economic Models, Opinion Polling and Prediction Markets," CEPR Discussion Papers 5555, C.E.P.R. Discussion Papers.
- Andrew Leigh & Justin Wolfers, 2006. "Competing Approaches to Forecasting Elections: Economic Models, Opinion Polling and Prediction Markets," NBER Working Papers 12053, National Bureau of Economic Research, Inc.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-03 (All new papers)
- NEP-FOR-2006-06-03 (Forecasting)
- NEP-POL-2006-06-03 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
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- Phillip Metaxas & Andrew Leigh, 2013. "The Predictive Power of Political Pundits: Prescient or Pitiful?," CESifo Working Paper Series 4261, CESifo Group Munich.
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