Prediction Markets Update (September 11, 2008)

As of 3:10 p.m. Central time today, the McCain Intrade contract (2008.PRES.McCAIN) is trading at 51.5, which is 1.7 points up from yesterday’s close of 49.8, whereas the Obama Intrade contract (2008.PRES.OBAMA) is trading at 47.7, which is 1.2 points up from yesterday’s close of 48.9.

Examining the state-by-state contracts, I find that by using a cutoff price point of 55 for allocating Electoral College votes, that this currently gives Barack Obama 264 Electoral College votes and John McCain 265 Electoral College votes. Since yesterday, the VIRGINIA.REP and NEVADA.REP have both rallied by roughly 5 points (to 60 and 59.9 respectively), while the NEWHAMPSHIRE.DEM has rallied 8 points to 65, so it would appear that Virginia and Nevada are moving more solidly to McCain’s advantage, whereas New Hampshire is moving even more in Obama’s direction. Out of the 102 total contracts (Democratic and Republican) offered (for the 50 states and the District of Columbia), only the two Colorado contracts (COLORADO.DEM and COLORADO.REP) remain within my arbitrarily defined “swing state” price interval, since the last trades on these contracts were 55 and 48 respectively. Other things equal, at this point it appears that Colorado is absolutely pivotal, since its 9 Electoral College votes could put either candidate over the 270 vote total required to win the presidential election.

Finally, for what it’s worth, Nate Silver over at FiveThirtyEight currently puts the Electoral Vote for Obama and McCain at 270 versus 268, which shows once again that a simple, cursory inspection of state-by-state prediction market prices produces a result which is qualitatively quite similar to the result obtained by Mr. Silver’s much more sophisticated PECOTA model.

Addendum: September 11, 2008 Electoral College Vote allocation

John McCain (265): Alabama (9), Alaska (3), Arizona (10), Arkansas (6), Florida (27), Georgia (15), Idaho (4), Indiana (11), Kansas (6), Kentucky (8), Louisiana (9), Mississippi (6), Missouri (11), Montana (3), Nebraska (5), Nevada (5), North Carolina (15), North Dakota (3), Ohio (20), Oklahoma (7), South Carolina (8), South Dakota (3), Tennessee (11), Texas (34), Utah (5), Virginia (13), West Virginia (5), and Wyoming (3)

Barack Obama (264): California (55), Connecticut (7), Delaware (3), District of Columbia (3), Hawaii (4), Illinois (21), Iowa (7), Maine (4), Maryland (10), Massachusetts (12), Michigan (17), Minnesota (10), New Hampshire (4), New Jersey (15), New Mexico (5), New York (31), Oregon (7), Pennsylvania (21), Rhode Island (4), Vermont (3), Washington (11), and Wisconsin (10)

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