Advanced Search
MyIDEAS: Login

Predictive accuracy of political stock markets: Empirical evidence from an European perspective

Contents:

Author Info

  • Berlemann, Michael
  • Schmidt, Carsten

Abstract

In a meta study of 25 political stock markets conducted in Germany in the last decade we analyze their predictive success. Although the predictions of political stock markets are highly correlated with the corresponding polls, the markets are able to aggregate additional information. One explanatory variable for variations in predictive success of the German stock markets relative to the polls is market efficiency. Even though the overall predictions of the political stock markets are quite reliable on the aggregate level we find systematic prediction errors on the contract level that can be attributed to the vote share size and to individual trader biases. --

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://econstor.eu/bitstream/10419/48116/1/335458556.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Dresden University of Technology, Faculty of Business and Economics, Department of Economics in its series Dresden Discussion Paper Series in Economics with number 05/01.

as in new window
Length:
Date of creation: 2001
Date of revision:
Handle: RePEc:zbw:tuddps:0501

Contact details of provider:
Postal: 01062 Dresden
Phone: ++49 351 463 2196
Fax: ++49 351 463 7739
Email:
Web page: http://www.tu-dresden.de/wiwi/
More information through EDIRC

Related research

Keywords: political stock markets; forecasting; market efficiency; proportional representation;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Jacobsen, Ben & Potters, Jan & Schram, Arthur & van Winden, Frans & Wit, Jorgen, 2000. "(In)accuracy of a European political stock market: The influence of common value structures," European Economic Review, Elsevier, vol. 44(2), pages 205-230, February.
  2. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. Robert Forsythe & Murray Frank & V. Krishnamurthy & Thomas W. Ross, 1995. "Using Market Prices to Predict Election Results: The 1993 UBC Election Stock Market," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 770-93, November.
  4. Beckmann, Klaus & Werding, Martin, 1996. "'Passauer Wahlborse': Information Processing in a Political Market Experiment," Kyklos, Wiley Blackwell, vol. 49(2), pages 171-204.
  5. Bohm, Peter & Sonnegard, Joakim, 1999. " Political Stock Markets and Unreliable Polls," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(2), pages 205-22, June.
  6. Forsythe, Robert & Rietz, Thomas A. & Ross, Thomas W., 1999. "Wishes, expectations and actions: a survey on price formation in election stock markets," Journal of Economic Behavior & Organization, Elsevier, vol. 39(1), pages 83-110, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Hansen, Jan & Schmidt, Carsten & Strobel, Martin, 2001. "Manipulation in political stock markets: Preconditions and evidence," SFB 373 Discussion Papers 2001,61, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  2. Hans Gersbach & Markus Müller, 2011. "Information Markets, Elections and Contracts," CESifo Working Paper Series 3327, CESifo Group Munich.
  3. Hans Gersbach & Markus Müller, 2010. "Flexible pensions for politicians," Public Choice, Springer, vol. 145(1), pages 103-124, October.
  4. Hans Gersbach & Markus Müller, 2006. "Elections, Contracts and Markets," CER-ETH Economics working paper series 06/56, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  5. Carsten Schmidt & Axel Werwatz, 2002. "How accurate do markets predict the outcome of an event? The Euro 2000 soccer championships experiment," Papers on Strategic Interaction 2002-09, Max Planck Institute of Economics, Strategic Interaction Group.
  6. Hans Gersbach & Oriana Ponta, 2012. "Unraveling Short- and Farsightedness in Politics," CER-ETH Economics working paper series 12/158, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  7. Michael Berlemann & Forrest Nelson, 2005. "Forecasting Inflation via Experimental Stock Markets Some Results from Pilot Markets," Ifo Working Paper Series Ifo Working Papers No. 10, Ifo Institute for Economic Research at the University of Munich.
  8. Michael Berlemann, 2004. "Experimentelle Aktienmärkte als Instrumente der Konjunkturprognose," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 57(16), pages 21-29, 08.
  9. Berlemann, Michael, 2001. "Forecasting inflation via electronic markets: Results from a prototype market," Dresden Discussion Paper Series in Economics 06/01, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:zbw:tuddps:0501. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.