Gar Lipow wrote:
>Today's WAPO contains the following:
>http://www.washingtonpost.com/wp-dyn/articles/A5696-2003Jul30.html
>>The futures market in orange juice concentrate is a better predictor
>>of Florida weather than the National Weather Service.
>>The Iowa Electronic Markets outperform the opinion polls in
>>predicting presidential election vote shares. Hewlett Packard ran
>>a market forecasting printer sales that outpredicted any of its
>>analysts.
>Does anyone know how true or false the above is?
Judging by the results from the 2000 and 2002 IEM results, I think markets are just oipinion polls by other names.
--tim francis-wright
Congressional Control Market http://www.biz.uiowa.edu/iem/graphs/congress00.gif
The market has no clue that Republicans will control the
House but not the Senate (control being 51 or more seats).
(In fact, exactly the opposite shares had higher prices for much
of the market.)
Presidential Election Vote Share Market <http://128.255.244.60/pricehistory/pricehistory_SelectContract.cfm?market_I D=25>
The election yielded vote shares of 0.499 Dem, 0.497 Rep,
and 0.004 Reform. The market consistently overestimated
the Reform vote and in the days leading up to the election,
overestimated the Rep vote as well.
1 November: 0.504 to 0.519
4 November: 0.500 to 0.515
6 November: 0.496 to 0.530 (ending the day at 0.520).
Presidential Election Winner-Take-All Market http://www.biz.uiowa.edu/iem/graphs/pres00_WTA.gif
Gore shares were worth $1 in this market, which was based
on the popular vote total. Yet Bush shares were worth more
from October 16 through November 7, the day of the election.
Even though Gore had a substantial lead in the popular vote,
the "outperform[ing]" market still had traders selling Rep
shares for nontrivial amounts 3 days after the election.
2002 Congressional Control Market http://www.biz.uiowa.edu/iem/graphs/Cong02.gif
The market predicts that the Republicans will not control the
Senate. Oops.
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