Queensland election indicator.

Readers of The Economist may be
familiar with the political predictions of the Iowa Electronic Markets. That
great British magazine regularly publishes the market on the US Presidential election
as an alternative to relying on the opinion polls because history shows it is a
better indicator. Without going in to all the detail the average
error of opinion polls is 1.9% compared to an error of 1.5% for markets.
The Iowa Electronic Markets are
operated by faculty at the University of Iowa Tippie College of Business as part
of its research and teaching mission and like all good markets has the advantage
of a large number of participants and trading limits that limit market
distortions caused by a major player. In Australia there is as
yet no equivalent but perhaps there will be when the Packer empire gets its
Betfair betting exchange under way shortly. In the meantime those seeking a
guide as to what the opinion polls really mean must look to orthodox
bookmakers. Enter the Crikey Queensland Election
Indicator where we take the prices of the leading internet bookmakers, subtract
their profit margin, and end up with the percentage chance given to each
political side winning. This morning the Indicator shows: Labor
85.3%; Coalition
14.7%.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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