Last night, Ted Cruz ostensibly took first place in Iowa with Donald Trump taking second – but if you follow the money, you’ll see that neither have any reason to celebrate.One way to predict elections is to look at betting odds on them. Betting statistics on candidates actually have a record of beating polls in predicting the success of a candidate. Among the reasons are that some have inside information, factors other than polls are taken into account, and the wisdom of the crowds (groups of individuals know more than experts).
Fox News’ John Stossel and Maxim Lott run the website electionbettingodds.com, which aggregates betting statistics on candidates and can therefore calculate their odds of winning the election.Clinton’s odds of winning the Democrat primary was 81 percent, actually up 1 percent from last week. Despite Bernie’s close race, bettors don’t think this means what the pundits do.
Where bettors are revising their odds is in who the Republican nominee will be. Last night’s caucus turned the odds on their head.
While Trump was given a 42.6 percent chance of winning the Republican primary prior to the caucus, his odds tanked to 26.5 percent. Despite Cruz’s victory, his odds only rose 1.2 percentage points to 12.6 percent.And for the big winner? Look below:
Despite placing third, the caucus caused Rubio’s odds to skyrocket.The media wants to paint the race as a battle between Donald Trump and Ted Cruz, but don’t take their word for it. The people who bothered to put their money where their mouths are saying otherwise.
[Note: This post was authored by The Analytical Economist]