Polls to probabilities: comparing prediction markets and opinion polls

Reade, J. J. ORCID: https://orcid.org/0000-0002-8610-530X and Vaughan Williams, L. (2019) Polls to probabilities: comparing prediction markets and opinion polls. International Journal of Forecasting, 35 (1). pp. 336-350. ISSN 0169-2070 doi: 10.1016/j.ijforecast.2018.04.001

Abstract/Summary

Forecasting election outcomes is a hugely popular activity, and not without reason: outcomes can have significant economic impacts, for example on stock prices. As such, it is economically important, as well as of academic interest, to determine the forecasting methods that have historically performed best. However, forecasts are often incompatible, as some are in terms of vote shares, and others are probabilistic outcome forecasts. In this paper we set out an empirical method for transforming opinion poll vote shares into probabilistic forecasts, and then evaluate the performance of prediction markets and opinion polls. We compare along two dimensions: bias and precision. We find that converted opinion polls perform well in terms of bias, and prediction markets on precision.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/77452
Identification Number/DOI	10.1016/j.ijforecast.2018.04.001
Refereed	Yes
Divisions	Arts, Humanities and Social Science > School of Politics, Economics and International Relations > Economics
Publisher	Elsevier
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