Polls and bears: Can markets predict elections better than pollsters?

Back in 1988, Jesse Jackson claimed an upset victory in the Michigan Democratic primary. Time called it his “Michigan miracle” because the pollsters never saw it coming. And while it wasn’t as monumental a misstep as “Dewey Defeats Truman,” the polls’ blind spot got three Iowa business professors thinking: Could the markets do a better job at predicting election outcomes?

Need to Know correspondent Win Rosenfeld went to Iowa to take a look at what those professors came up with: the Iowa Electronic Markets (IEM). The IEM is the only non-profit futures market in the U.S. and has a pretty great track record when it comes to prognosticating on political winners and losers. But can markets replace polls? Need to Know travels outside the beltway and into the Corn Belt to find out.

 
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Comments

  • Jon Cryer

    Of course, anyone who has taken “Stat 101″ should know that even well done statistical polls are not intended to predict the future. They are cross-sectional rather than longitudinal. They do an excellent job of doing what they were designed to do–that is, describe the facts at a given point in time.