January 9th was a Wednesday
Pollsters and Psychics
From Justin Wolfer’s article on the wsj.com:
While Sen. Clinton’s unexpected victory has yielded red faces among the punditocracy, this also provides a useful opportunity for emphasizing just what a prediction market forecast says. That the price of a contract paying $1 if Sen. Clinton won in New Hampshire was selling for seven cents doesn’t suggest that she was a sure loser. Rather, these prices suggest a probabilistic statement that the ultimate outcome was about a 7% chance. And as any horseplayer can tell you, sometimes the long shots do win.
Note also that when the long shots win, you never know how far ahead they’ll finish. Clinton didn’t just eke out this win—it wasn’t a matter of a couple thousand votes. Twelve pollsters ate it on this one, largely because of the long-shot win Obama pulled off in Iowa. Any psychic would have made the same mistake. The numbers are just interpretations of history, and anybody waving their hands and selling them as anything else puts themselves at the mercy of the unpredictable.
Now, Kucinich taking New Hampshire: That’d be a real edge case.
