Dec. 4, 2007
Iowa Electronic Markets to offer Huckabee contract
The Iowa Electronic Markets will begin trading contracts for Republican presidential candidate Mike Huckabee at noon Wednesday, Dec. 5 Central Standard Time.
Joyce Berg, IEM director and professor of accounting in the University of Iowa's Tippie College of Business, said the decision to offer a Huckabee contract was made after seeing the price of the IEM's Republican Rest of Field contract rise consistently over the past few weeks. She said that because Huckabee appears to be the strongest of the candidates represented by the Republican Rest of Field contract, his contract will be spun off first.
The former Arkansas governor's popularity has surged among Iowa Republicans in recent months. Huckabee's climb started with a surprisingly strong second place finish at the Iowa Republican Party's straw poll in August. He's been the subject of significant media coverage since then, and public opinion polls show him steadily increasing his strength.
A UI Hawkeye Poll in October showed that Huckabee had pulled into a virtual second-place tie among likely Iowa Republican caucus-goers, and a recent Des Moines Register poll taken a month later shows him pulling into first place, ahead of Mitt Romney.
Huckabee's success has come despite having a low-profile campaign in the state waged with little money. Most election analysts point to his conservative credentials as responsible for his jump in Iowa, as the Baptist minister's positions appeal to the many Christian conservatives who actively participate in the state's GOP.
Berg pointed out that the price of the Republican market's Rest of Field contract -- the contract that Huckabee investors would purchase in the absence of a specific Huckabee contract -- recently hit 24 cents. Only Rudy Giuliani had a higher priced contract, at 36 cents.
The Huckabee contract will join existing Republican candidate-specific contracts for John McCain, Giuliani, Romney, and Fred Thompson on the electronic prediction market operated by the UI's Tippie College of Business. The Democratic nomination market continues to offer candidate-specific contracts for Hillary Clinton, Barack Obama and John Edwards.
The contracts will pay off when each party formally nominates its candidate at its convention next summer. The nomination process kicks off with Iowa's first-in-the-nation caucuses on Jan. 3, 2008.
As of 10 a.m. Tuesday morning, Giuliani led the Republican field with a contract price of 35 cents, followed by Rest of Field at 29.5 cents, Romney at 24.2 cents, McCain at 7.6 cents and Thompson at 5 cents.
Clinton continues to lead the Democratic field at 65.4 cents, with Obama at 28.9 cents, Edwards at 6.5 cents and Rest of Field at 2 cents.
Information about the nomination markets, contract prospectuses and instructions on opening a trading account may be found on the IEM 2008 U.S. Presidential Nomination Markets Web site at http://www.biz.uiowa.edu/iem/markets/nomination08.html.
Begun in 1988, the IEM is a research and teaching tool that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.
STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Iowa City, Iowa 52242-2500