Berg Compares Polls, IEM
Bookmark & ShareOctober 13, 2004
Polling organizations handicap the election by asking people how they're going to vote. Is this the most accurate source of predicting election outcomes? Maybe not. The fact is that people who put their money where their mouth is, in other words, bettors, may in fact be more accurate in predicting the outcome of elections. "If you look at polls run during the election and we've looked at about 600 polls," says JOYCE BERG, a professor at the University of Iowa, "what we found is 75 percent of the cases, the Iowa market prices predict the actual vote share of the election better than polls." Berg is talking about a low-stakes trading market that the university's business college has sponsored for years. Participants can wager from $5 to $500 in winner-take-all futures markets in everything from political races to box office receipts. Primary purpose? Giving students the ultimate incentive to learn. "I poured all of my money into Kerry and as sort of a hedge to my bet I poured some into John Edwards as well and it ended up that Kerry and Edwards went one-two in the Iowa caucus. So, I started with about $20 and went up to $120 after that," says Iowa student Jonathan Sargent. The television news station is based in New Mexico.
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