Election Betting Not Such A Good Predictor

It appears election betting odds are not as good a predictor of voting intentions as I thought.

On the morning of the federal election, I ran a simulation which produced the most likely outcome of 98 seats for the Coalition, 49 for Labor and 3 independents, although I did comment that this probably overestimated the Coalition’s chances because the betting in seats like Werriwa was unrealistic. Ten days prior, I got 91 – 57 – 2.

Now, with most seats in the lower house determined, the currently most likely result is 90 – 55 – 5. Bob Katter and Andrew Wilkie were returned as most people thought they would. Cathy McGowan appears to have secured Indi with a very strong campaign against unpopular Liberal incumbent Sophie Mirabella. The generally well heeled, but pious, lefty flock of inner city Melbourne have asked for four more years of sanctimonious preaching from middle class hypocrites, returning the Greens’ Adam Bandt with only a 1% swing against him and in a disturbing upset, self promoting windbag, Clive Palmer looks almost certain to win Fairfax. Perhaps the good people of Bundaberg believe the carbon tax will fade their curtains.

So where did the simulation go wrong?

Clearly, Adam Bandt paying $2.35 and Clive Palmer paying $5 significantly underestimated the chances of both candidates. Shorter odds would have seen the simulation produce many outcomes with 4 or 5 independents.

The odds for Kingsford-Smith, Parramatta and Werriwa in Sydney and Wayne Swan’s Brisbane electorate of Lilley were also clearly wrong, but these predictions were discounted when scaling back the forecast number of Coalition seats from 98 to 94 or 95. Interestingly, they were more or less correct two weeks ago when they favoured the ALP, although Werriwa was only won by about 3500 votes. Some nongs must have done their money with sizeable bets on the Liberal in these seats.

Four of the late flips: Page, Petrie, Hindmarsh and Lyons did end up falling to the Coalition. McEwen, Capricornia and Lingiari are all tight, as per the betting. However, Blair was easily retained by the ALP, with a +1.5% swing. The Liberals’ Teresa Harding must have been a pretty ordinary candidate.

Speaking of poor candidates, the Liberals virtually threw away Greenway by standing Jaymes “we have a solar panel” Diaz. What a fucking dunce! Yet he was paying about $1.20 to win the seat.

So, wrong odds for Adam Bandt and Clive Palmer and a few seats with very poor Liberal candidates. If a candidate is paying $1.20, they will win in most simulated scenarios. A handful of those types of errors and your simulation overestimates by 5 or 6 seats.

Of course, the bookies did well from the misestimated payouts: the odds for the Coalition only came in in these seats because people placed (losing) bets on them.