US Election 2016: Who's right about the Republicans - polls or the market?
While Donald Trump and Ben Carson dominate polls for the Republican Nomination, Betfair markets remain relatively cold on their chances, with money piling in for Marco Rubio. Paul Krishnamurty investigates the stark difference between polls and betting.
"Betfair punters can't get enough of Marco Rubio. From around 10% for the nomination going into the first of three impressive TV debates, the Florida Senator is now rated clear favourite at 36%, at odds of [2.7]...despite trailing Carson by 18% in today's survey."
Sunday's re-election of Turkish President Recep Erdogan dealt a further blow to the most established means of predicting politics. Erdogan's AKP won decisively with 49.4%, compared to an average of 43.7% in the last five opinion polls.
In fairness, late opinion polls were banned from publication so perhaps they would have picked up that significant late swing, but there's no recent evidence to suggest that would have been the case.
They certainly didn't in May's UK election, when even polls published on the day predicted a virtual dead-heat, rather than a 6% Conservative victory. Nor was NO projected to win the Scottish Independence Referendum by anything like 10%.
Likewise in the 2012 US Election, polls were famously predicting a virtual dead-heat, rather than a landslide Obama victory. At the same time as pundits were claiming it was 'too close to call', Betfair's Next President market rated him over 80% likely to win.
No wonder what seems like the entire commentariat are dismissive of polls for the Republican Nomination showing outsider, non-politicians Donald Trump and Ben Carson dominating, sharing around 50% of the vote.
Interestingly, Betfair markets appear to be taking little notice of the numbers. Trump has moved up to second place, but only due to the hapless Jeb Bush's demise and Scott Walker's surprise exit.
Despite leading the polls clearly throughout, The Donald has traded back and forth between 6% and 9% for the presidency, 11% and 18% for the nomination. At odds of [14.0] and [6.2], those ratings are now 7% and 16% respectively.
Confidence in Carson is even weaker. Tipped earlier as a good outside trade for the Presidency at 65.0, the neurosurgeon is recorded 6% clear at the top in today's NBC/WSJ poll. Yet while those luxury odds have disappeared, he's still a [25.0] (4%) chance for the Presidency, [10.0] (10%) for the nomination.
Meanwhile, Betfair punters can't get enough of Marco Rubio. From around 10% for the nomination going into the first of three impressive TV debates, the Florida Senator is now rated clear favourite at 36%, at odds of [2.7]. At [6.0] (17%), he's the only single-figure priced alternative to Hillary Clinton for the presidency. This despite trailing Carson by 18% in today's survey.
How Marco Rubio's odds have freefallen since the start of the TV debates
It is hard to recall a moment when polls and betting markets were this far apart. The explanation is that polls are a rigid, scientific exercise, measuring a snapshot of public opinion, rather than offering a prediction. That's why we shouldn't be too critical of failures at elections - predicting how voters will behave in the future - is not an exact science.
In contrast, political punters are free to take a longer view, weighing no end of additonal factors, including numbers buried deep in those polls. For example in the latest New Hampshire poll, Rubio's best score there yet, doubling or even tripling his share in the past few weeks, is arguably more interesting than Trump's sustained lead.
The estimation of most experts is that this is a long race, for which inexperienced outsiders are ill-suited. They'll wilt under scrutiny and lack the organisation to win a nationwide campaign. Eventually the established politicians, able to defend detailed policy proposals, will come through.
Moreover, the current polls are hampered by the sheer number of runners. There won't be anything like 14 names on the Iowa ballot. When the strugglers withdraw, their votes are likelier to transfer to another established politician, rather than outsiders whose bandwagon they've already swerved.
Eventually as the field shrinks and we get closer to the Iowa Caucus on February 1st, we should see some correlation between polls and betting markets. For now though, it will be fascinating just to see how these differentials shift in the coming weeks. Will Donald Trump ultimately prove to be the saviour of the polling industry, or just another reason to follow the gamblers?
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