Academy Awards

Our Oscar predictions have been 19 for 24, 21 for 24, and 20 for 24 over the last three years, in the binary outcome space (i.e., the most likely candidate won the Oscar). Of the 12 “misses” 11 have been the second most likely and one has been the third most likely. But, our predictions are not probabilities for a reason; if we only cared about which candidate was the most likely and not how likely, we would not bother calibrating the difference!

What we are most proud of is the calibration of the Oscar predictions. In the 72 categories (24 per year) we have forecasted in the last three years, the average forecast for the leading candidate was 82%. Thus, on average, we expected to “win” a category 82% of the time and “lose” a category 18% of the time. Thus, 0.82*72 = 59 “wins” and 0.18*72 = 13 “losses” in expectation. Our 60 “wins” is pretty well calibrated!

Oscar Night 2015 - Updated Outcomes

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The most updated outcome with Oscar eve predictions (which were posted at 1 PM ET on Oscar Day):

Oscar Night 2015

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12:06 AM ET: 20 for 24 with Birdman's win!!! Another huge victory for prediction markets. Perfectly calibrated with average 82% for most likely candidate in the 24 catagories = expected outcome of 20 wins. And, a prediction markets did a great job in raising probability of victory of Birdman to 90% as Oscar night unfolded ...

11:56 PM ET: With Actor Eddie Redmayne (The Theory of Everything) and Actress Julianne Moore (Still Alice) both winning, we are 19 for 23 with just one to go!

11:43 PM ET: The markets were increasingly convinced as the night progressed and it happend ... Birdman's Alexandro G Inarritu take the Director award! Brings us 17 of 21 with just 3 to go ...

11:35 PM ET: OK - now 16 of 20 with the Imitation Game's win for Adapted Screenplay, but another tight loss for Original Screenplay where had Grand Budapest Hotel, but Birdman second ...

We have held all along that Mitt Romney will be the Republican Party's nominee for president. Since his double win last week in Arizona and Michigan, his odds in the prediction markets have jumped above 80 percent. That's likely to go up again after Super Tuesday, since the most likely scenario has Romney winning 7 of the 10 states, Rick Santorum taking 2, and Newt Gingrich winning his home state of Georgia.

The question is whether voters in future primaries decide the race is effectively over after Tuesday and flock to Romney, or whether Santorum lives to fight another day in the polls. A big-enough night for Santorum could prolong his eventual defeat, since polls tend to be more short-sighted than markets. Here are the odds for his odds in today's individual elections.

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

I'd like to examine one rather glaring error in the fundamental model for elections I have created with Patrick Hummel and explain why we're not going to fix it: Massachusetts stands at 74.4 percent likely to go to Obama, while all external signs dictate that it is a much safer bet for the Democrats. This is because we currently assume Mitt Romney will win the nomination, as the prediction markets suggest.

There is overwhelming empirical evidence that presidential candidates get abnormal returns in their home state. In 1984, for example, Walter Mondale still won Minnesota even though the other 49 states all went to Ronald Reagan. (Mondale also held down Washington, D.C.) So Yahoo! Labs' Patrick Hummel and I tested this theory with data from the last ten election cycles. We determined the size of that abnormal return, calibrated on those past races. This boost shifts Massachusetts from a Democratic lock to a Democratic-leaning state. It currently flips for Romney if Obama's approval rating falls to 41 percent, well before similar states.

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

The longer-than-expected Republican primary has given many more voters a chance to meet the candidates and cast ballots in meaningful elections, but it has caused some in the party to worry that it is weakening the eventual winner in his confrontation with President Obama. Mitt Romney is still the heavy favorite to win the nomination, with 75.2 percent odds to Rick Santorum's 9.8 percent, but the data suggests he could be looking at a Pyrrhic victory. The president's odds of re-election jumped to above 60 percent in the days after Santorum's big wins on February 7, according to prediction markets. Since then they have steadily crept up; by contrast, Obama spent the fall and early winter hovering around 50 percent.

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

Some media outlets are relying on measures of positive and negative sentiment in social media to forecast the Oscars. We are big supporters of the value of social media to understand public interest and opinion. But, as of now, there is modest predictive power in these social indexes; the data is too new to properly debias it, correlate it with outcomes, and fully understand its relative merit. For example, Ron Paul has consistently dominated measures of social sentiment, but it has not translated into victories at the polls. Followers of this social sentiment index are declaring a tight race for Best Picture, whereas The Artist has an overwhelming likelihood of victory.

Click Here for the Full Text.