A good bet?
There have been stories floating around about National being favourite to win the election because Australia’s betting agency Centrebet says so. Election odds are usually a better predictor of election results than polls, these stories sometimes mention.
The theory is as follows. When a pollster calls you up and asks you who you’re going to vote for, there are all kinds of reasons why you might not tell the truth or why you might state a preference when you haven’t really got one yet. However, when you go into a betting agency and have to part with cold, hard cash, you really will back the player you think is going win. So, betting market behaviour is a better predictor of election results that what voters tell pollsters.
That’s the theory. The reason why I’m not sure it’ll hold in our election (at least, not this early), is that Centrebet will be basing its odds on very few bets and thus the betting market will be shaped by pretty weak information. So far, the odds are as follows for a bet on who will be Prime Minister after the election:
Don Brash: $1.80
Helen Clark: $1.90
Winston Peters: $101
Rodney Hide: $251
That there are odds at all on Rodney Hide suggest that the odds are being set almost exclusively based on where money is being put, not on what bookies know about the political race in front of us. Indeed, that Rodney Hide has odds at all says nothing at all about his political prospects but a great deal about the profligacy of his supporters. If I were setting odds right now, I’d install Helen Clark as favourite, if only because she has more potential coalition options after the election than does Don Brash.
To be sure, the odds will be an interesting, extra piece of information during the election campaign. However, at this early stage, we certainly shouldn’t put that much store in them.
July 27th, 2005 at 11:20 am
Crooked Timber has had a couple of interesting posts on betting markets, and their conclusion is that the only reason they could be considered a better source of information is if they allow insider trading. Where inside knowledge is impossible (or at least highly unlikely - as in a free and fair election), then they simply accumulate the daily newspaper headlines, hashed through the prejudices of the people (usually right-wing loons) who play on them.
In other words: treat with a large pinch of salt.
July 27th, 2005 at 1:53 pm
I have set up my own book here and have Labour a tad in front of National on a head-to-head basis. (just one of the options available). Anyone wanting to make their call is encouraged to do so.
I have followed centrebet on this issue and will add to I/S that it is the market which determines the rates as much as the bookies setting high to attract punters. The market consists of wild-eyed and well-heeled optimists sure of their convictions. At this point that would be Nats.
July 28th, 2005 at 8:16 am
does this suggest idiot old chap that right wingers have more money than left winger ? wouldn’t it be better then to use the savant part of brain and become wealthy by becoming ACT party supporter, you get rich
savy? now Savo a 5% difference in the moneu big difference, follow the money Sav get sav,
now savant, chipper he only got a few more years to go before he realises realise that socialism dead, and then he stop pay so many tax to fascists beficiaries,and well fwwog, I don’t know, he gots the religion bads and he follow preacher rod, not so hopeful for him but we do try to help him,
July 28th, 2005 at 9:08 am
I raised over to look at Centrebet after seeing this, sensing easy money.
Unfortunately, while it will letme bet for Rodney Hide becoming PM, I appear to be unable to bet _against_ Rodney Hide being prime minister at any odds.
I don’t gamble. But that wouldn’t have been gambling.
July 28th, 2005 at 9:50 pm
I really hate polls close to an election. Not that we are yet, but within a week or so of the election I don’t think there should be any polling. It/ the media tries whip people into this paranoid frenzy and all the uncertains become even more uncertain about who to vote for. I think it influences the outcome. I’d be interested to hear what anyone else thinks of that
But at least we don’t have a time difference over the country & broadcast some results before others have even voted yet however so that’s something.