Are you ever annoyed to see survey results reported on TV, not knowing how the questions are asked and how many people participated, etc? I am frequently annoyed because there are many ways survey results can be manipulated. You may have seen survey results that involved as few as 200 participants. Anyone who has had a basic statistics class knows that sample size, and how a question is posed, is critical. Statistics are very easily manipulated.
You may have heard Ann Coulter refer to a website called “Intrade” — There is a reason for that. It is historically accurate. It is a market of political votes. What does that mean? All “voters” on this site pay money to make their predictions. In effect, people are “putting their money where their mouths are.” On a given day, the number of trades is usually in the thousands. For example, the number of trades predicting Gingrich will be the Republican nominee reached near 15,000 predictions (for and against) in recent days and weeks.
Here is a quote from Wikipedia on Intrade: “Intrade has offered since 2002 the widest range of markets for political events, such as ‘George W. Bush to win 2004 US Presidential Election’. In the 2004 presidential election, the market favorite won the electoral vote in every state. This occurred when, even as late as election day, many pollsters and analysts were predicting a John Kerry victory. In Florida, a number of polls put Kerry ahead in that state, or said the race was too close to call. The betting markets, however, correctly and consistently showed Bush would win Florida comfortably.”
Why does “market voting” carry more clout than other surveys? The presumption is that “investors” putting money on the line possess as much information about the subject “market” as is possible. Obviously, there is no perfect way to predict future events, but people investing real money “to vote” is a much truer form of survey than anything being collected over the phone. The person answering the phone for a survey may not know anything and may not really care.
As of this writing (12/10/11 at 2:30 PST), Intrade is predicting Gingrich will be the nominee at a 32.5% probability, with Romney at a 47.4% probability. It also shows that the probability is increasing for Romney and decreasing for Gingrich.
So, when you are annoyed at all the noise coming from the pundits — spouting their predictions — just go to your favorites tab, click on www.intrade.com and look at what the markets are predicting. And you will be far more informed than all those who are repeating the noise of the talking heads. To get a thorough understanding of how Intrade makes its predictions, click on the tab HOW IT WORKS for a complete explanation. It is a very simple, but efficient market. It is a great way to get a quick view of “the market” for Governor Romney.