It’s election day! The campaign has been only 33 days. I think K and I have managed to post on about 8 of those days so I dont think anyone’s going to give us jobs as bloggers any time soon. But the good news is that he is visiting me from MIT and we’re going to try make some predictions in the coming hours.
Like K said, it seems pretty apparent from all the polls and other analysis that the Coalition is going to get up. So our first goal of showing the effectiveness of betting markets in predicting the overall election isn’t going to be really tested. One thing we can point to is that the betting markets were definitely a lot more aggressive with a big Coalition win a lot earlier than a lot of the polls. Just two days after Rudd called the election, the betting markets pointed to the Coalition winning 84 seats to the ALP’s 65. At that time, the national level polls were calling it pretty close. The Newspoll 2 party preferred on both Aug 4 and Aug 11 was 52-48 in favor of the Coalition. So we werent complete muppets.
Anyway, we want to make amends re our poor blogging record. In the next few hours, we’re going to post
a. our final seat prediction
b. the probability distribution of the seat predictions
c. 95% confidence interval re the seat prediction
d. predictions for each seat
e. predictions re various seats we think are interesting
f. rantings and ravings as we get tired
So thank you for reading our shitty blog!
We posted a few weeks ago about the likelihood of a complete Labor wipeout in Tasmania: our models gave it a probability somewhere between 5% and 25%. Even a probability of 5% seemed pretty high at the time, given Labor currently hold every seat in Tasmania, except for Denison (held by Andrew Wilkie).
With the election one day away, we wanted to revisit this scenario. The odds should have considerable predictive power by now. Using the same methodology as the previous post, we estimate the probability of a Labor wipeout in Tasmania to be somewhere between 22% and 35%! Conservatively, that’s roughly the probability of flipping a coin twice and getting two heads. It’s more likely not to happen, but there is still a very considerable risk it will.
Looking at the individual seat probabilities, Bass and Braddon appear to be comfortable Coalition gains. Wilkie appears likely to retain his seat in Denison. Franklin and Lyons are the two seats that could still go either way, with Franklin leaning towards Labor (61% chance of Labor victory) and Lyons leaning towards the Coalition (58% chance of Coalition victory). If the implied probabilities of Labor victory drop in Franklin, the probability of a Labor wipeout will increase substantially. We’ll take another look at this scenario when we publish our predictions in the next day or so.
The betting odds suggest the ALP is facing a massive defeat on Saturday. But even worse for Labor, their expected seat count is still deteriorating.
Expected seat counts using Sportsbet betting odds from September 5
Our latest analysis in the AFR (a link will be up shortly) was conducted earlier in the week, where our analysis showed the betting markets predicting Labor would win 51 seats. Underdogs often regain a little ground leading into the final few days of the election campaign, so we thought that number might increase before election day. In fact, as of September 5, the markets now expect Labor to win more like 49 seats.
Barring an act of God, the overall election outcome looks like a foregone conclusion. Both our independent and maximum covariance models give Labor literally zero probability of victory. This is astonishing, since the maximum covariance model had been giving Labor a small but non-zero chance of winning up until very recently. The reason for this change appears to be many of the probabilities moving towards a clear victor in some of the seats that were relatively uncertain previously. As the seat probabilities move closer to 1 or 0, the choice of covariance structure has a smaller impact on the predicted result.
Leng and I will be posting our final predictions shortly. Putting aside any political views on a big Coalition victory, an easily predictable election is not a good test of our methodology! So we’ll be making predictions about individual seat results, and possibly a few scenarios, too. Stay tuned.
So K and I are running a few days behind the data. We’ve set up a kron job to automate the scraping of the data each day from the Sportsbet website, but it takes us a bit of time to organize ourselves re doing the analysis and then writing up the post. So the data is kind of fresh in that it’s new to the blog. But we know it’s a bit stale given we’re blogging about it 6 days late. Sorry about that.
We’ve just completed the analysis for the data from July 11. In the press, it’s all been about how the national level polls are tightening and the election is going to be close. Accordingly, we’re seeing more stories where the inevitability of an Abbott government is increasingly being questioned whereas before all the pressure and focus was on the ALP.
Our electoral level analysis differs a bit from the national polls. It shows the ALP making up a bit of ground, but the margin between the two parties re the expected number of seats won is still pretty large.
On July 11, the ALP had increased the expected number of seats they would win by 4 from the number predicted on June 30 (increase from 56 to 60). We’re mindful that the original election date of Sept 14 is pretty far away, and possibly going to change. (There’s a bit of chat that Nov 2 could be the new date.) But the electoral level analysis has not swung as dramatically as the national level analysis. We’ll look at a few reasons why this might be the case in coming posts.
July 11 – Predicted seats won