Thursday, January 26, 2012
Who is winning the GOP Primary: Obama
This graph showing the betting in the Iowa Elections Market, and educational stock market were people can trade stocks in political outcomes. Though there have been a lot of missed projections in this market over the years it does generally represent the sentiment of the population.
Since there is real money at play here, if someone thought the odds were wrong they could make money buying and selling stocks in candidates. So overtime the market should reflect a consensus valuation in a candidates odds.
For example right now a share of Obama runs about 60 cents, a share of GOP about 40 cents. At election time the person holding a winning share will get a full dollar. So the odds on Obama are set presently about 6 out of 10.
The drop in the GOP over the past 6 months shows, in part, the negative impact the primary is having on the party. Unlike with the Democrats in 2008 this year the primary process is working against the party out of power.