- University of Texas – Markets vs. polls as election predictors: An historical assessment
his paper assesses the accuracy of US presidential election betting markets in years before and after opinion polling was introduced. Our results are provocative. First, we find that market prices are far better predictors in the period without polls than when polls were available. Second, we find that market prices of the pre-poll era predicted elections almost on par with polls following the introduction of scientific polling. Finally, when we have both market prices and polls, prices add nothing to election prediction beyond polls. To be sure, early election markets were (surprisingly) good at extracting campaign information without scientific polling to guide them. For more recent markets, candidate prices largely follow the polls.
- Journal 0f Economic Prospective – Historical Presidential Betting Markets
A large, active and highly public market for betting on elections existed over much of U.S. history before the Second World War. 2 Contemporaries noted this activity dated back to the election of Washington and existed in organized markets (such as financial exchanges and poolrooms) since the administration of Lincoln. Although election betting was often illegal, the activity was openly conducted by “ betting commissioners ” (essentially bookmakers) and employed standardized contracts that promised a fixed dollar payment if the designated candidate won office. The standard practice was for the betting commissioner to hold the stakes of both parties and charge a 5 percent commission on the winnings.
- University of North Carolina – The Long History of Political Betting Markets: An International Perspective
Political future markets, in which investors bet on election outcomes, are often thought a recent invention. Such markets in fact have a long history in many Western countries. This paper trace s the operation of political futures markets back to 16th Century Italy, 18th Century Britain and Ireland, 19th Century Canada , and 20th Century Australia and Singapore. In the United States, election betting was a common part of political campaigns in the pre-1860 period, but became increasingly concentrated in the organized futures markets in New York City over the post-1860 period.
How does this compare to previous election cycles?