K and I are obviously not the only ones doing this prediction caper for the Australian election. Aside from the AFR coverage using our stuff, we enjoy reading Simon Jackman’s stuff in The Guardian. We dont know Simon but he’s got a stellar background – professor at Stanford in both the politics and statistics department. Some of his research uses Bayesian techniques which is stuff K and I have been reading.
On Aug 2, Simon Jackman had an article in the The Guardian about betting markets. He uses effectively the same simulation we do – get implied probabilities from betting markets, runs lots of simulations and get the distribution of outcomes. Based on his 1 August simulation, he predicts the ALP will win 61 seats. This is a few less than our model predicts but in the same ballpark, unlike the national polls which are effectively predicting the ALP winning around 75 seats.
Why does Simon’s predictions differ from ours? From what we can tell, the only difference is that he is using data from both Centrebet and Sportsbet, and then averaging the implied probability. We’ve only got data from Sportbet. It may also be possible that he is not correcting for the longshot bias that we discussed in a previous post. This might mean that in his model, seats that will likely end up in the ALP column are given to ‘other’ candidates. If you look at our predictions before we corrected for the longshot bias, we had thought the ALP would win around 60-62 seats too. Anyway, after reading Simon’s article, it’s good to know me and K are not cray. We’re going to enjoy this song and the rest of our weekend. Hope you do too!