A guest post by Oliver Strijbis, Sveinung Arnesen, Kjetil Thuen, and Lucas Rachow*
Two weeks ago we published on this blog the predictions taken from our prediction market on the outcome of the ballots from March 3. The predictions were taken on February 22 – nine days before the official voting day. Our predictions deviated from the official results from 0.3% to 6% depending on the ballot. After one year of experience with prediction markets we come to the conclusion that this result is largely representative of our predictions over the last year.
The prediction on the Yes-vote for the “Bundesbeschluss über die Familienpolitik” was a strike. The prediction was that 54.6% of the voters would be in favor of the law while on voting day it was 54.3% (0.3% deviation). With only 3.2% deviation also our prediction on the “Raumplanungsgesetz” was rather accurate: while we expected a Yes-share of 59.7% on voting day it was 62.9%. The least precise prediction was on the share of Yes-votes for the “Abzocker-Initiative” – the most hotly debated proposal – where we expected 61.9% Yes-votes against the resulting 67.9% (6% deviation).
The predictions were rather representative of our experience with the prediction market since our first try one year ago. First, the predictions have been more precise the closer the outcome was. This is clearly reflected in our experience with the 26 ballots (15 national and 11 cantonal) for which we made predictions during the last year. Secondly, the accuracy of our predictions were within the range that we found for the predictions made previously. While the accuracy is typically within a 5% margin of error when the Yes-votes are between 40% and 60% it gets larger when the outcome is more clear (as with the “Abzocker-Initiative”).
Overall, after one year of applying our prediction markets to Swiss direct democratic decisions we can conclude that they have considerable potential. While they might not necessarily be equally precise as electoral forecasts they clearly allow to get a good feeling about the probable outcome of ballots at an early stage of the campaign and in particular when the race is close.
* Oliver Strijbis is a postdoctoral researcher at the University of Hamburg, Sveinung Arnesen is a postdoctoral researcher at the University of Bergen. Together with Kjetil Thuen and Lucas Rachow they are founders of politikprognosen.ch.