On Super Tuesday, Clinton's Lead Slips on IEM
As of 8 a.m. CST Tuesday, Clinton lead the market with a contract price of 52 cents, to Obama's 46.9 cents. The figures mean the market believes there is a 52 percent probability that Clinton will be the nominee, and a 46.9 percent probability Obama will be the nominee.
As recently as last Thursday, Clinton led with a price of 64 cents a contract, but her price dropped to 55 cents Friday following Obama's endorsement by two Kennedys. It continued to drift over the weekend as public opinion polls showed a tight race between the two in key Super Tuesday states.
Meanwhile, the IEM's Democratic and Republican nomination markets reached a milestone last week, when the one-millionth contract was traded in the combined markets since they opened March 2, 2007. So far, more than $100,000 has traded hands on each market. The markets, operated by the University of Iowa's Tippie College of Business, is a real-money political prediction market in which investors buy and sell shares of the candidate they think will win an election.
The IEM's nomination markets will pay off following the party conventions this summer, after each party officially nominates its presidential candidate. The IEM does not predict the winner of the caucuses or primary elections in individual states.
On the Republican nomination market this morning, John McCain continues to hold a commanding lead. As of 8 a.m. CST today, his contracts sold for 88.8, meaning investors believe there is an 88.8 percent chance McCain will be the Republican Party's nominee. Mitt Romney was in a distant second place at 11.7 cents and Mike Huckabee was trading at less than 1 cent.
Contracts are still being traded for former candidates John Edwards, Rudy Giuliani and Fred Thompson, though all are priced at less than 1 cent.
Begun in 1988, the IEM is a research and teaching tool that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.
The IEM can be found online at tippie.uiowa.edu/iem. Nominating market prices can be found at iemweb.biz.uiowa.edu/quotes/Nomination08_Quotes.html.
Contact: Joyce Berg, Director, Iowa Electronic Markets, 319-335-0840