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Prediction markets vs polls – an examination of accuracy for the 2008 and 2012 elections

Author

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  • Sveinung Arnesen
  • Ole Bergfjord

Abstract

Which technique is more accurate in predicting the outcome of U.S. presidential elections, polls or prediction markets? Several studies on this have been conducted in the past. We use market data and poll numbers, included adjusted version of the poll numbers, to reexamine this question based on the two last American presidential elections, in 2008 and 2012. We find that the market predictions outperformed the polls for these elections, and that adjusting the polls makes them less accurate relative to prediction markets, if anything.

Suggested Citation

  • Sveinung Arnesen & Ole Bergfjord, 2014. "Prediction markets vs polls – an examination of accuracy for the 2008 and 2012 elections," Journal of Prediction Markets, University of Buckingham Press, vol. 8(3), pages 24-33.
    • Handle: RePEc:buc:jpredm:v:8:y:2014:i:3:p:24-33
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    Cited by:

    1. Chih‐Yu Chin & Cheng‐Lung Wang, 2021. "A new insight into combining forecasts for elections: The role of social media," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 40(1), pages 132-143, January.
    2. Restocchi, Valerio & McGroarty, Frank & Gerding, Enrico & Johnson, Johnnie E.V., 2018. "It takes all sorts: A heterogeneous agent explanation for prediction market mispricing," European Journal of Operational Research, Elsevier, vol. 270(2), pages 556-569.
    3. Axén, Gustav & Cortis, Dominic, 2019. "Extending the price constraints of betting markets," Journal of Behavioral and Experimental Finance, Elsevier, vol. 23(C), pages 181-188.
    4. Sung, Ming-Chien & McDonald, David C.J. & Johnson, Johnnie E.V. & Tai, Chung-Ching & Cheah, Eng-Tuck, 2019. "Improving prediction market forecasts by detecting and correcting possible over-reaction to price movements," European Journal of Operational Research, Elsevier, vol. 272(1), pages 389-405.
    5. Forsell, Eskil & Viganola, Domenico & Pfeiffer, Thomas & Almenberg, Johan & Wilson, Brad & Chen, Yiling & Nosek, Brian A. & Johannesson, Magnus & Dreber, Anna, 2019. "Predicting replication outcomes in the Many Labs 2 study," Journal of Economic Psychology, Elsevier, vol. 75(PA).

    More about this item

    Keywords

    Prediction Markets; Election Forecasting; Election Campaign; Polls; Iowa Electronic Markets; US Presidential Election;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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