June 4, 2008
IEM investors favor Obama over McCain in general election
With Barack Obama all but sealing the Democratic presidential nomination Tuesday, investors on the University of Iowa's Iowa Electronic Markets give him a significant edge over Republican John McCain to win the popular vote in November.
As of 9 a.m. CDT Wednesday, the Democratic contract representing Obama on the IEM's Winner Take All market traded for 61.6 cents. This means investors believe there is a 61.6 percent probability that he will win the popular vote in the general election.
The Republican contract that represents McCain was trading at 40.9 cents, which means investors believe there is a 40.9 percent probability he will win the popular vote.
The prices on those two contracts have been largely unchanged for several weeks.
The IEM's two nomination markets are still open for trading, and will remain open until the parties formally nominate Obama and McCain at their conventions later this summer. As of 9 a.m. today, Wednesday, June 4, on the Democratic nomination market, an Obama contract was trading for 93.5 cents. Hillary Clinton's contracts were trading for 3 cents, while Rest of Field traded for 2.1 cents and John Edwards at less than 1 cent.
McCain was trading for 94.4 cents on the Republican nomination market, with Rest of Field trading at 1.5 cents. Contracts for Mike Huckabee, Rudy Giuliani, Mitt Romney and Fred Thompson traded for less than 1 cent each.
The Iowa Electronic Markets is a real-money political futures prediction market operated by professors in the University of Iowa's Tippie College of Business. 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.
More information on the IEM can be found at http://www.biz.uiowa.edu/iem.
Data for the presidential election market can be found at http://iemweb.biz.uiowa.edu/pricehistory/PriceHistory_GetData.cfm.
STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Iowa City, Iowa 52242-2500