Friday, 12 June 2009

This week's election fix

They are going to the polls in Iran today and the Crikey Election Indicator is going with them. Our assessment of the probable outcome of the presidential election, based on the action at the Intrade prediction market, is that the incumbent Mahmoud Ahmadinejad is in grave danger of being defeated. The Crikey Indicator has the probability of him winning at just under 33% with one Mir Hussein Moussavi favourite as almost a 64% chance.
How the market has made its judgment is unclear to me because the evidence of the opinion polls is far from clear cut.
And I did note a cautionary tale on the Radio Free Europe/Radio Liberty website headed "Checkered Past Of Iranian Opinion Polls Leaves Much In Doubt" which pointed out how the pollsters had a far from distinguished record before previous elections. Be that as it may I am fearless fellow and have taken the Indicator's guidance as a study of past results from a multitude of countries shows me that the final market normally does not get the favourite short enough - that is it wins on more occasions than the probability suggests that it should.

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