2008 Election Odds
You can gamble on anything, of course. And so oddsmakers began taking bets for the next presidential election in January. In case you’re interested, Hillary is the overwhelming favorite for the Democrats @ 11/10, followed by Bill Richardson, John Edwards, Al Gore, and Russ Feingold @ 6/1, 7/1, 12/1, and 14/1 respectively. Longshots include Tom Daschle, Tom Vilsack, John Kerry, Barack Obama and Wesley Clark. The Republican race is much closer, at least for bettors. The apparent leaders are Jo9/2)hn McCain (6/4), George Allen (9/2), and Mitt Romney (11/2). Rudolph Guiliani, Condoleeza Rice, Rick Santorum, Chuck Hagel, Bill First, and Sam Brownback are other potential candidates given odds better than 16/1. The Democratic Party is slightly favored to win the election, with mostly 8/11 odds against even odds for Republicans.
A market oriented variation on gambling is TradeSports. Here you can buy and sell contracts for particular candidates. You get $100 per contract if the candidate becomes the party’s nominee. Each candidates contracts are bought and sold at a discount based on buyers and sellers assessment of the candidate’s likelihood of winning. Because the aggregate price of a contract for each candidate is roughly $100 (actually a bit more), the price of each contract can be read as a rough percentage as in an opinion poll. The favorites are a bit different here than those offered by the gambling professionals. For the Dems it is Clinton (43.2), Warner (19.6), and Gore (17), for the Republicans McCain (39.1), Allen (16.6), Giuliani (13.3) and Romney (10.9). The Democratic field is still favored over the Republican, 49.0 to 48.2.
I mention this because TradeSports also displays volume - the number of each contract that have been bought or sold. Some candidates have drawn more attention than others, not necessarily in proportion to the assessment of their chances. Clinton tops the Democrats in volume (42k contracts), but Gore is much closer (38k). Other volume leaders are those with name recognition: Warner (14k), Obama (13k), Kerry (13k), Edwards (10k). Condoleeza Rice’s contracts are popular relative to the chances oddsmakers give her. Volume leaders on contracts for the Republican nomination are McCain (26k), Rice (24k), Guiliani (12k), Allen (12k), and Jeb Bush (10k). Mitch Romney as attracted little more interest (8286 contracts) than the unlikely candidate Dick Cheney (7421).
What does this tell us? Dude, I don’t know. Certainly it suggests which of the more marginal candidates have some recognition. The bookies place Rice only just ahead of Rick Santorum (8/1 vs 14/1), but Santorum lags far behind both in terms of asking price (0.1 vs Rice’s 5.5) and volume (3.5k vs Rices 24.1k). Personally I am hopeful - his contracts suggest Al Gore is a popular, if unlikely, choice.
Thursday, July 13, 2006