IEM More Accurate Than Polls
October 26, 2002 | Las Vegas Review -JournalPolitical pollsters might just be an endangered species if the claims of at least one wagering Web site are to be believed. The IOWA ELECTRONIC MARKETS, a nonprofit Web site operated by faculty at the UNIVERSITY OF IOWA TIPPIE COLLEGE OF BUSINESS as part of its research and teaching mission, is proving more accurate in predicting outcomes than the priciest professional polls. The fundamental reason for accuracy is that people tend to be more thoughtful when "they're putting their money where their mouth is," said University of Iowa finance professor THOMAS RIETZ. This is true despite the fact the sums are small (starting accounts require a minimum of $5 and a maximum of $500), he said. The market also tends to attract people who are genuinely interested in politics and therefore more likely to make informed decisions, Rietz said. And markets learn from themselves because participants can see each others predictions, he said. The site has provided a market since 1988 for traders to buy and sell contracts predicting U.S. election results. Currently about 19,000 people are placing trades from all across the U.S. and overseas on the November election.
Contact: Thomas Rietz