Election 2016: looking back at October and November 2016
Prediction markets are thought to be a helpful tool for “seeing what may happen” because they aggregate the bets of folks with money behind what their take.
Here’s Iowa Exchange Market price data for Trump vs. Hillary November 2016:
Taking the day before election day (November 7, 2016), one gets the following contracts traded:
What the average price of .55 for UDEM16_VS means is this market was suggesting 55% we would win and the .473 UREP17_VS means 47.3% chance that the Donald would pull off his surprise victory. It won’t add up to a 100% because the contracts are not being traded in that way, but it indicates that Trump was an underdog, though perhaps less that the absolute assurance with which many (including myself) had of Clinton winning.
Election Day shows how surprising Trump’s victory really was as he jumps from a low of 43% to high of 79.7% on November 8, 2016