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 nonprofit 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.