Friday, January 9, 2015

Polls, pundits and the odds

The star of the 2012 USA Presidential campaign was actually a wonk named Nate Silver. His New York Times blog statistically aggregating polls turned out to be spot-on despite persistent accusations from Republicans right to the end that it was a flawed liberal conspiracy. Apparently even Romney believed this right up to drafting the concession speech.

So we come to Queensland where recent polls show a close contest on 2PP estimates while bookmakers odds currently LNP $1.14 v ALP $5.00 put the probability of an LNP win at 84%.  Polls v Bookies is a topic that has previously been addressed By John Quiggin: Polls and Punters.  Way back in 2009 Possum Comitatus provided an excellent guide on how to relate betting odds with polls: What are the Odds?

Efficiency of the betting market is a critical factor. With markets open and trading at Sportsbet current betting market today (Friday) for our regional electorates:

Cook: ALP 1.09- LNP 10.00 - KAP 12.00
Barron River: ALP - 1.50 - LNP 2.00
Cairns: ALP: 1.30 - LNP 3.30
Mulgrave: ALP: 1.01 - LNP 12.00

Translated to probabilities based on this market betting Cook would be lost and there is work to do for the LNP to save Barron River and Cairns. These are the probabilities of an ALP win based on those odds:

Cook 83.3%
Barron River 62.5%
Cairns 71.7%
Mulgrave 92.2%

However that is very early days before even all candidates are known in what would likely be an inefficient market for individual electorates. I have no idea how the bookies set the initial odds but suspect it would be related to the required swing and broad polls. Also this is very different from the Cairns Post last October: LNP in for election fight in Cairns and Barron River at Queensland election according to ReachTEL survey

The Post Pundits all rated Cook as safest for the LNP based on the poll despite being held on the finest margin. A clue here is a post by The Poll Bludger at Crikey who came to the entirely opposite conclusion re Cook based on the same poll: ReachTEL: 51-49 to LNP in Queensland.

The bludger points out that the margin for error of each individual electorate on that Post poll sample may be about 5% so not particularly useful in a close contest. What he then does is aggregate the poll on a regional basis for all and apply this to the required margins. The spread by Poll Bludger, at least between the electorates, more resembles the bookies but with lower probabilities overall for the ALP.

The most efficient betting market for any electorate would likely be Ashgrove which will obviously attract way more money than any other. The probability of an ALP win is currently at 54.7% here despite a relatively tight margin so it can't yet be given away on the odds. Despite that the probability of an LNP Government absent Campbell Newman becomes significant.

The aforementioned Possum Comitatus has been keeping a relatively low twitter profile of late given his role at the Together Union backed WQ4 but did tweet this graph of their Ashgrove polling when the election was announced.

If you add up a quick and nasty analysis of the Sportsbet odds for individual electorates the ALP would currently get to 40 out of 89 where they are currently being quoted over a 50% probability of winning. Pundits are anticipating about 5 or so from independents and minor parties. At this stage I would guess an outcome closer to 30 for the ALP based on the broader numbers consistent with the betting odds.

A more effective opposition in a unicameral parliament combined with a swag of highly marginal seats would be a welcome outcome. Meanwhile I will finish my wonky rant and leave the final word on the early status of the campaign to Possum:

Possum Comitatus @Pollytics  ·  22 hours ago
It's the end of Day 3 of the election campaign, and no one has been caught with their dick in a wine glass. Well done Qld


Update: Poll Bludger on the most recent polls Newspoll and Galaxy: 53-47 and 52-48 to LNP in Queensland; The ABC site compiled by Antony Green is also a useful resource Queensland Election 2015

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