Obama-McCain Gap Widens on Iowa Electronic Markets
The price of a contract for the Democratic presidential nominee reached 77 cents on the IEM's Winner Take All market at 8 a.m. today, a jump of 20 cents over the 55-cent price it was at one month ago.
The 77-cent figure means investors on the IEM believe there is a 77 percent probability that Obama will win the popular vote in the general election next month.
At the same time, the price of a contract for Republican candidate John McCain fell to 25 cents this morning.
A similar gap has opened on the IEM's Vote Share Market. At 8 a.m., a contract for Obama was selling at 54.3 cents, which means traders believe he will receive 54.3 percent of the two-party popular vote.
A contract for McCain on the Vote Share market, meanwhile, was selling at 47.4 cents.
The Iowa Electronic Markets is operated by the University of Iowa's Tippie College of Business as a real-money futures prediction market. 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.
The latest presidential market price quotes can be found at iemweb.biz.uiowa.edu/quotes/Pres08_quotes.html.
Contact: Tom Snee, UI News Services, 319-384-0010