November 2012

Just 20 days after the 2012 election, the United States Commodity Futures Trading Commission (CFTC) brought its hammer down on Intrade, the most recognized prediction market in the United States. This action was not entirely surprising and indeed its specter may have kept some traders away. Yet, despite this, and while Intrade is just one of many valuable sources in understanding upcoming events, Intrade's volume and reach was especially critical in understanding the real-time impact of major events. Whatever the CFTC's reasons, the crackdown represents a win for entrenched financial and gambling interests, and a loss not just for Intrade and its US-based traders, but for researchers (including three Nobel Laureates) who study the use of markets as forecasting tools.

The CFTC ruling will bar United States-based investors from utilizing Intrade moving forward. The ruling creates a non-negligible possibility that the prediction market could close, as the CTFC has previously noted that up to 40 percent of Intrade's users are located in the United States. At minimum, if it survives, the ruling will restrict the dispersed information that Intrade was able to collect from users within the United States.

There are two questions to ask when evaluating a political prediction, whether it's from Nate Silver, a pollster, an academic or your favorite Yahoo News predictions blog:

A) How useful was the prediction the day before the election?

B) How useful was the prediction the day after the election?

A great deal of attention is devoted to scoring the performance of various seers and prognosticators on Point A. We went 50 for 51 in that regard, getting every state correct except Florida—of course it was Florida—in our last prediction before voters went to the polls. (We might humbly point out that our original prediction, announced in February, was precisely the same as the one we made on Nov. 5. And, predictions in February are a lot more useful to the multi-billion dollar campaign industry than predictions in November.)

Evaluating Point B is trickier. Have forecasters like Silver, who relies primarily on aggregating polls, taught us anything about how elections work and what motivates voters?

While polls do offer some insight into how public opinion responds to high-profile events—though always at a delay of at least a day—they're powerless to reveal the high-level factors, such as the economy, that influence elections months and even years ahead of time. That's why The Signal prefers to start with models, like the one we debuted in February: It teaches us which factors correlate with election results and which do not.

Click Here for the Full Text on Yahoo!'s The Signal

Wednesday Update (Syndicated n Yahoo!'s "The Signal" Blog)

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The senate is almost wrapped up with just one more race left to play out.

Last February, the Signal predicted that President Barack Obama would win reelection with 303 electoral votes to his opponent's 235--a prediction we made before the Republican party had chosen the identity of that challenger. This struck many people as absurd at the time: There were nine months of campaigning left, two conventions, several billion dollars worth of advertising, four debates, and untold bumps in the road for both sides.

As of 1 a.m. EST this morning, 50 of 51 of those predictions are correct, with about 60,000 votes separating the candidates in Florida. If Romney can win the state, the Signal will have gone a perfect 51 for 51.

February's Prediction

We point this out not to brag--mostly not to brag--but to say that it's a vindication for the broad view of presidential elections: That they are the product of a complex stew of social and economic forces, not a contest between candidates and campaigns. At the time, the Signal's prediction model included only one measure of public opinion: Obama's approval rating, which stood at just below 50 percent at the time. The rest of predictions were driven by a model of those macro-factors--incumbency, economic growth and contraction, and so forth--that exist independently of the names and faces on the tickets.

Anyone can average a bunch of polls and call the election a week before it happens. In the end, it's the models that tell us something about what forces influence election. We will talk in most depth over the coming days (with a minimum of gloating) about how our model maintained its consistency as it shifted to include more polls and prediction markets in the weeks and months that followed the initial take. But we are proud to have provided a consistant and correct message to our readers for the last few months.

Click Here for the Full Text on Yahoo!'s The Signal

Election Night Scoreboards (Syndicated on Yahoo's "The Signal" Blog)

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12:40 AM: Forecasting that same sex marriage will win in all 4 elections: MD, ME, and WA legalized and MN not criminalizing.

12:20 AM: 2 senate seats are now looking more Democratic: Montana and North Dakota.

11:30 PM: For comparison, here is the first tables from this afternoon (below).

11:10 PM: Obama is the next president. He has secured enough electoral votes. (Called on the Signal at 10:44 PM).

3:45 PM: We will be updating this chart regularly until the election is decided. I suggest you check back to this page for the quickest possible updates.

Below are the links to all of our updates:

As liftoff approaches Tuesday evening, the Signal will be focusing (like everyone else) on a small handful of states whose outcomes are not certain or nearly certain well before polls close. Here's a viewer's guide:

The no-drama states

There are 37 states, plus Washington, D.C., who we consider certain for one candidate or another. President Barack Obama controls 14 states and D.C., totaling 186 electoral votes. Gov. Mitt Romney controls 23 states, totaling 190 electoral votes. Virtually every news organization agrees on this list, with only minor variations. The only way Obama or Romney picks off one of these states is if the polls are wildly, wildly wrong and the entire country has shifted dramatically to one side.

The only-a-little-drama states

Seven more states are leaning hard toward one of the candidates (poll closing times in parentheses): Pennsylvania (8 PM ET), Michigan (8 PM and 9 PM ET), Minnesota (9 PM ET), New Mexico (9 PM ET), Wisconsin (9 PM ET), and Nevada (10 PM ET) are leaning heavily toward Obama, for a total of 67 electoral votes. North Carolina (7:30 PM ET), with 15 electoral votes, is leaning heavily toward Romney.

If there are no surprises there, that gets us to 253 electoral votes for Obama and 205 for Romney. Therein lies the central challenge that the Romney campaign has faced since the beginning.

The lots-of-drama states

Six states remain that will probably not be called for hours after the polls close. They are: Virginia (7 PM ET), Ohio (7:30 PM ET), New Hampshire (8 PM ET), Colorado (9 PM ET), and Iowa (10 PM ET) and Florida (7 or 8 PM, depending on county.)

Click Here for the Full Text on Yahoo!'s The Signal

In addition to providing comprehensive election news and real-time results, Bing Elections also provides unique social media insights and analysis. And as we count down to Election Day, social media buzz on the candidates, parties, issues, results and more are only intensifying. As a way to help people make sense of the noise, we created and report discussion levels for every major elections topic popping across Twitter on Bing Elections.

This discussion level scale is sourced by something that we call the Bing Social Media Interest Richter Scale, which categorizes the level of buzz on the presidential candidates across key issues popping in Twitter. The three levels are chatter (every day levels), discussion (an event), and hot (a major event). Generically, the discussion levels provide you with an easy to understand scale for how much social media is discussing a given person, sets of people, topics, etc. To provide transparency to these values, below is a snapshot of the Bing Social Media Interest Richter Scale, the proprietary tool, which we use to gauge discussion levels. The internal scale puts current values into historical context and provides people with an easy way to compare events. The scale is a powerful resource for anyone interested in benchmarks comparing the current and past social media interest levels on a given person or topic.

In the last two days, six new polls of Ohio voters have been released, five of which favor President Barack Obama, by leads of 6 points, 4 points, 4 points, 3 points and 2 points. The last reports a tie, from right-leaning Rasmussen, which gave former Gov. Mitt Romney a 2-point advantage last week. Obama now has a 3.1 percentage point lead in Pollster's average for Ohio and a 2.9 percentage point lead in the RealClearPolitics average for Ohio.

A 3 percentage point lead is hardly an insurmountable margin for Obama. But it has been so consistent over the past several weeks that Romney ought to be hoping that the polls favor Obama on a systematic basis by overestimating the turnout of respondents with demographics that favor him. This is certainly possible, but it would mean that many different polling institutions are making similar mistakes. The outcome of Ohio, then, will be as much a referendum on the art of polling as it will be on the art of the presidency.

Click Here for the Full Text on Yahoo!'s The Signal

In the last two days, six new polls of Ohio voters have been released, five of which favor President Barack Obama, by leads of 6 points, 4 points, 4 points, 3 points and 2 points. The last reports a tie, from right-leaning Rasmussen, which gave former Gov. Mitt Romney a 2-point advantage last week. Obama now has a 3.1 percentage point lead in Pollster's average for Ohio and a 2.9 percentage point lead in the RealClearPolitics average for Ohio.

A 3 percentage point lead is hardly an insurmountable margin for Obama. But it has been so consistent over the past several weeks that Romney ought to be hoping that the polls favor Obama on a systematic basis by overestimating the turnout of respondents with demographics that favor him. This is certainly possible, but it would mean that many different polling institutions are making similar mistakes. The outcome of Ohio, then, will be as much a referendum on the art of polling as it will be on the art of the presidency.

Click Here for the Full Text on Yahoo!'s The Signal

In the latest YouGov/Xbox poll, the pivotal state of Ohio showed slightly more Romney supporters than Obama supporters. But, when asked who they expect to win Ohio, the same respondents predicted Obama would win their state. Justin Wolfers and I have conducted an exhaustive research project on the power of expectation polling, and the evidence is overwhelming: when the intention (i.e., support) and expectation of respondents in a poll point in opposite directions, the expectation is correct over 75 percent of the time.