# Election predictions: InTrade vs. 538 **URL:** \ **Category:** Politics & Elections\ **Created:** [June 21, 2012, 9:12pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888 "2012-06-21T21:12:01Z")\ **Posts on this page:** 17\ **Page:** 2
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [June 28, 2012, 9:33pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/21 "2012-06-28T21:33:22Z")
You can’t really call “oops” on a single prediction, though. I mean, even if they got the true a priori probability right, they’d still have failed more than 1 time in 4. Seeing something that has a 1 in 4 chance but still happens is hardly earthshaking. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [June 29, 2012, 1:16am UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/22 "2012-06-29T01:16:26Z")
…and it was a 5-4 decision with Roberts changing his vote at the last minute: It is impossible for a lawyer to read even the first few pages of the dissent without coming away with the impression that this is a majority opinion that at the last moment lost its fifth vote. Its structure and tone are those of a winning coalition, not that of the losing side in the most controversial Supreme Court case in many years. But when we get to Page 13, far more conclusive evidence appears: No less than 15 times in the space of the next few pages, the dissent refers to Ruth Bader Ginsburg’s concurring opinion as “Justice Ginsburg’s dissent.” [http://www.salon.com/2012/06/28/did\_john\_roberts\_switch\_his\_vote/singleton/](http://www.salon.com/2012/06/28/did_john_roberts_switch_his_vote/singleton/) ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [July 1, 2012, 6:45pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/23 "2012-07-01T18:45:21Z")
> [@Ravenman](#): > > Not directly on topic, but InTrade blew it on the health care mandate. For the past month, the bettors at InTrade believed that there was greater than a 70% chance that the mandate would be unconstitutional. > > Oops. How is that inconsistent with the decision of the court? Intrade showed a 30% chance it would be upheld. It was upheld. Intrade on Obama has gone up for two days since the SCOTUS decision; Romney has gone down for two days. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [July 2, 2012, 2:09am UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/24 "2012-07-02T02:09:19Z")
> [@Fear\_Itself](#): > > How is that inconsistent with the decision of the court? Intrade showed a 30% chance it would be upheld. It was upheld. > > Intrade on Obama has gone up for two days since the SCOTUS decision; Romney has gone down for two days. Nonsense. Mormons don’t go down. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [July 2, 2012, 2:58am UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/25 "2012-07-02T02:58:29Z")
> [@Chronos](#): > > There have been times in the past when Intrade’s odds on political events have fluctuated wildly due to the actions of one individual bettor, … The use of a market like that for prediction requires that there be large money action. I don’t think Intrade’s action is large enough to qualify. I’ve lost the URL for the site that synopsized all sportsbook positions, but AFAIK the money volume figures would be unavailable there anyway. > [@Chronos](#): > > Seeing something that has a 1 in 4 chance but still happens is hardly earthshaking. Indeed one can suspect the predictions are poor unless about 25% of the 1-in-4 longshots succeed. ---
**Author:** ![ultrafilter](https://avatars.discourse-cdn.com/v4/letter/u/3d9bf3/32.png) [@ultrafilter](https://boards.straightdope.com/u/ultrafilter)\ **Post date:** [July 2, 2012, 3:11am UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/26 "2012-07-02T03:11:19Z")
The standard evaluation for a probabilistic forecaster is what’s known as being calibrated, which means exactly what **septimus** said: out of all the events that they claim has probability _p_ of happening, the proportion that happens is about _p_. An uncalibrated forecaster is definitely bad, but a calibrated forecaster can actually also be pretty awful. For instance, if it rains 25% of the time, a weather forecaster can predict a 25% chance of rain every day and be calibrated but of seriously questionable value. There’s a [nice article here](http://blog.oddhead.com/2006/12/26/evaluating-probabilistic-predictions/) that spells this out a bit more, explains some of the other approaches, and has links for those who’d like to a bit of follow-up reading. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [July 2, 2012, 4:23am UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/27 "2012-07-02T04:23:17Z")
> [@septimus](#): > > The use of a market like that for prediction requires that there be large money action. I don’t think Intrade’s action is large enough to qualify. I’ve lost the URL for the site that synopsized all sportsbook positions, but AFAIK the money volume figures would be unavailable there anyway. That’s a big issue. I argue that those who think they are smarter than intrade can make big money betting against it. Since they don’t, I assume that their opinions are at least partly hot air. This is a dubious argument. Consider the odds of an overt airstrike on Iran. Total volume has been around 10 on most days, though it peaked at 150 on June 28th. The price was around $2.20 per share, implying 22% odds. So maybe $330 of bets were made on that day for a Dec 2012 payoff of $330 or $1000 depending upon what happens. That’s a thin market. [http://www.intrade.com/v4/markets/contract/?contractId=750356](http://www.intrade.com/v4/markets/contract/?contractId=750356) Similarly the bid-ask ranges from 17.8% (to buy 2 shares) to 21.8% (to sell 11 shares). Now consider the odds of an Obama victory. Daily volume averaged 2164 shares last month. Cool. Average closing prices were 5.35 (or 53.5%). That amounts to less than $12,000 per day. By way of contrast the small cap company Yelp had an average daily volume of 660,000 shares, priced at $22. Multiply it out and get $14,520,000 per day – over a thousand times higher. This for a company with negative profits, revenue of $83 million and maybe 150 employees. So much for speculation about the leader of the free world. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [July 2, 2012, 2:41pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/28 "2012-07-02T14:41:53Z")
> [@ultrafilter](#): > > The standard evaluation for a probabilistic forecaster is what’s known as being calibrated … There’s a [nice article here](http://blog.oddhead.com/2006/12/26/evaluating-probabilistic-predictions/) that spells this out a bit more, explains some of the other approaches, and has links for those who’d like to a bit of follow-up reading. Interesting links. I learned a little about the problem (though less about the solutions :rolleyes: ) when I was involved with data compression algorithms. (Probability estimation is often at the heart of data compression.) There are “paradoxes.” For example, the proper “average” of two 90% predictions might be more than 90% if the two predictors are uncorrelated! ---
**Author:** ![ultrafilter](https://avatars.discourse-cdn.com/v4/letter/u/3d9bf3/32.png) [@ultrafilter](https://boards.straightdope.com/u/ultrafilter)\ **Post date:** [July 2, 2012, 3:42pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/29 "2012-07-02T15:42:45Z")
> [@septimus](#): > > Interesting links. I learned a little about the problem (though less about the solutions :rolleyes: ) when I was involved with data compression algorithms. (Probability estimation is often at the heart of data compression.) There’s actually a very strong sense in which probability estimation, data compression and gambling are exactly the same problem. I would love to find an article that explains that in a way that a non-mathematician can understand, but I’m not holding my breath. ---
**Author:** ![GrandWino](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/grandwino/32/67_2.png) [@GrandWino](https://boards.straightdope.com/u/GrandWino)\ **Post date:** [July 2, 2012, 11:24pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/30 "2012-07-02T23:24:48Z")
An [update on the 538 numbers,](http://fivethirtyeight.blogs.nytimes.com/2012/06/29/june-29-obama-rises-to-67-8-percent/) Nate Silver’s model has Obama at a 67.8% chance of winning the electoral vote, the highest his chances have been since the model began. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [July 4, 2012, 12:53pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/31 "2012-07-04T12:53:31Z")
The Intrade on Obama has been a [near straight line increase](https://data.intrade.com/graphing/jsp/closingPricesForm.jsp?contractId=743474&tradeURL=https://www.intrade.com)since the SCOTUS decision on Obamacare. ---
**Author:** ![c007224](https://avatars.discourse-cdn.com/v4/letter/c/5f9b8f/32.png) [@c007224](https://boards.straightdope.com/u/c007224)\ **Post date:** [September 15, 2012, 2:42pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/32 "2012-09-15T14:42:16Z")
Success, what everyone here fails to mention is 538 is done by nate silver a statistical genius who precicted all but one state in 2008, and every single senate race…ill go with the statistical genius vs. this market crap ---
**Author:** ![Napier](https://avatars.discourse-cdn.com/v4/letter/n/ce73a5/32.png) [@Napier](https://boards.straightdope.com/u/Napier)\ **Post date:** [September 16, 2012, 1:04pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/33 "2012-09-16T13:04:35Z")
Intrade is a futures marketplace, not a prediction service. Claiming it predicts the future is misapplying what it was set up for. Traders could hedge their bets elsewhere by investing at Intrade. Suppose you had a financial interest in seeing “Obamacare” overturned, but you wanted to trade away some of your leverage to have greater security. You could invest in Obama winning the election, at Intrade. Now your future earnings are more predictable (though you stand to win or lose less). This is, after all, the nominal reason that other commodity futures markets were established in the first place. Others treating your investment as an informed prediction on your part is obviously reading too much into it. It does sound as though Intrade does tend to predict the future, but this is inadvertent. The degree to which this tendency persists could well change on the basic issues in the election per se – that is, Intrade’s accuracy could be confounded with the subject matter itself. Silverman, on the other hand, is famous for trying specifically to predict the future, and doing very well at it. ---
**Author:** ![ShibbOleth](https://avatars.discourse-cdn.com/v4/letter/s/848f3c/32.png) [@ShibbOleth](https://boards.straightdope.com/u/ShibbOleth)\ **Post date:** [September 16, 2012, 2:35pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/34 "2012-09-16T14:35:54Z")
They evolve over time and will approach each other as the election nears. ---
**Author:** ![zamboniracer](https://avatars.discourse-cdn.com/v4/letter/z/e9a140/32.png) [@zamboniracer](https://boards.straightdope.com/u/zamboniracer)\ **Post date:** [September 16, 2012, 3:16pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/35 "2012-09-16T15:16:01Z")
Both 538 and Intrade could both be right, of course. As I understand them, 538 takes the polls per state and applies them to project the Electoral College vote, while Intrade is more is more like a nationwide poll that doesn’t account for the Electoral College. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [September 16, 2012, 3:19pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/36 "2012-09-16T15:19:40Z")
> [@zamboniracer](#): > > As I understand them, 538 takes the polls per state and applies them to project the Electoral College vote, while Intrade is more is more like a nationwide poll that doesn’t account for the Electoral College. Intrade takes bets on the outcome of the Electoral College. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [September 16, 2012, 5:34pm UTC](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888/37 "2012-09-16T17:34:25Z")
538 also takes into account economic factors. They just slightly reduced Obama’s chance of reelection based on a manufacturing report. [Previous page](https://boards.straightdope.com/t/election-predictions-intrade-vs-538/625888.md?page=1)