|Thomas Rietz, an associate professor of finance at the University of Iowa and a co-director of the Iowa market has spoken out about putting too much weight into the current predictions found on the trading exchange and sites like it in terms of predicting the outome of next week’s US Presidential election. Currently the Iowa Electronic Market has Bush at a 61 percent chance of re-election. The similar site TradeSports has Bush at a 59 percent chance while NewsFutures has him at a much tighter 51 percent chance.|
Much analysis has been done on online betting and trading exchange sites with regard to the election, as the race is notoriously close and analysts, press and the public are searching all areas of information for some clue of who will win. Rietz came out with a controversial comment saying that using the Iowa market as a predicting tool is “not that much better than a coin flip”. He then went on to explain his comment by clarifying that the current offers needed to be taken in context with previous elections in order to interpret correctly.
While the 61 percent prediction of a win by Bush seems comprehensive, Rietz has pointed out that in the 996 election Clinton was offered a 95 percent chance of winning against Bob Dole. In comparison the current Bush percentage is less of a positive vote for his re-election. This is the thinking behind Rietz’s belief that the current status confirms the more general feeling that this particular election is still very difficult to call.