Gallup gold standard says McCain out to juicy odds. Arbitrage or gamble to the wire?
ChimbaChumba says - Once again, apologies to the millions of readers who rely on this site for their polling and betting analysis. ChimbaChumba has been temporarily inconvenienced by the IRS, normal service shall be resumed shortly. I couldn’t stay silent though when, after a few days out of action, I checked Betfair and our chosen pollsters.
Betfair: McCain $2.40, Obama $1.74
ChimbaChumba noticed a few days earlier McCain touched $2.20, and some smarties I canvassed at that time began to muse McCain might even be favourite (even if only temporarily) in next 1-2 weeks.
So why the drift to $2.40? First, ChimbaChumba reads the formguide -
- RealClear Politics - McCain +0.8, winning in Ohio
- CNN - deadheat
- Pollster - McCain +1.8
- 538 Electoral - McCain ahead there too, and winning Colorado, Ohio and deadheat Virginia.
- Gallup - McCain +1
Hmm, says ChimbaChumba - what am I missing? McCain $2.40 doesn’t correlate with those bare numbers.
OK - lets scratch a bit deeper. I only have time to read the gold standard Gallup, and it just confirms my initial impression that the betting market is currently just wrong by a big amount given election day draws closer.
If you donkeys bother to read the cut’n'paste below of two quotations from Gallup in todays analysis, even a donkey will divine that Gallup is saying they believe the race is currently even, with scope for McCain to be favourite if he merely holds his current poll lead for maybe 5-8 days longer, and/or it is highly likely the poll lead bounces back and forth (providing arbitrage opportunities).
SO ITS OBVIOUS - BACK MCCAIN AT $2.40. THE ONLY DECIsION AFTER GETTING SET IS WHETHER TO ARBITRAGE AT $1.80-$2.00 IF MCCAIN TIGHTENS, OR LET IT GO TO THE WIRE. OR SUE CHIMBACHUMBA IF OBAMA GETS ON A NEW WAVE.
Below copy from Gallup is just some extracts, the 2008 part analysing how history fits to 2008 polls. The 2nd part under my manufactured heading “Likely ping-pong of lead given is close” explains why it is also likely to stay closeish with lead changing hands given race is currently close at this stage of the campaign.
per Gallup: It’s still too early to estimate election probabilities, but if McCain retains an advantage in the weeks after the conventions ended, history says that he has a better than even chance of winning the election.
2008?
The results from the previous elections reviewed here were all based on Gallup’s first poll conducted after Labor Day. In all of these instances, both political party conventions were completed before Labor Day, and in some instances, weeks before Labor Day. For example, the last of the two conventions in 2000 was completed on Aug. 17, more than two weeks before Labor Day that year; in 1948, the last of the two conventions was completed in mid-July.
Labor Day this year was Sept. 1, with the Democratic convention taking place immediately before then (Aug. 25-28) and the Republican convention actually taking place on Labor Day and the three days that followed. Thus, it is obviously not appropriate to use Labor Day polling this year to compare to these historical examples. Gallup Poll Daily tracking in fact has shown much movement in the race in the days since Labor Day, with Obama having as much as an 8-point lead in a three-day period that included Labor Day, and McCain as much as a 5-point lead after his convention. As of Sept. 13-15, the race is at a statistical tie: McCain 47%, Obama 46%.
Likely ping-pong of lead given is close
The historical record reviewed here certifies that a change in the gap of up to 6 or 7 points would not be unusual between Labor Day and Election Day. This year, the data have already shown a change in the gap of 13 points from the high-water Obama gap to the high-water McCain gap since Labor Day. The unusual timing of the conventions, both of which fell close to Labor Day, makes it difficult to project probabilities of victory for one candidate or the other based on historical references to the calendar. More generally, it may be useful to refer back to Gallup’s previous analysis showing that, historically, competitive campaigns in which one candidate did not pull to a clear post-conventions lead remained close (with the lead switching back and forth) right through to the election.
