Blog Posts by David Rothschild, Yahoo! News

  • Accuser’s press conference cuts Herman Cain’s odds in half

    Sharon Bialek, the fourth woman to allege that Herman Cain sexually harassed her--and the first to do so live on television--spoke to the news media on Monday. Bialek's press conference appears to have cut Herman Cain's chances of winning the Republican presidential nomination almost in half.

    Just before it was announced that a woman and her attorney, Gloria Allred, would be holding a press conference Monday, the prediction markets gave Cain a 6.8 percent chance of becoming the Republican Party's presidential nominee. By the time the press conference ended, Cain's chances in the prediction markets had dropped to 3.8 percent.

    I do not know how long it will take for public opinion polls to reflect Cain's weakened position in the presidential race, but the prediction markets have spoken: There is more than a 96 percent likelihood that Cain will fall in the public-opinion polls before Republicans cast their real votes in the 2012 primaries and caucuses.

    Cain's likelihood of winning

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  • T-minus 363 days to election 2012: Welcome to The Signal!

    voters

    As voters head to the polls today for the 2011 elections, we are a little less than a year away from selecting the next President of the United States. As of this morning, there's a 67.3 percent chance that Republican Mitt Romney will challenge Democratic incumbent Barack Obama in the 2012 general election. Rick Perry, at 10.4 percent, is the second likeliest Republican nominee for President, with Newt Gingrich (8.3 percent) following closely behind. Barack Obama's likelihood of prevailing and winning reelection for a second term is slightly better than a coin flip; Obama has a 50.5 percent likelihood of victory.

    [ Destination 2012: Check out Yahoo!'s election headquarters ]

    These predictions, of course, are based on the best estimate of the dynamics in the presidential race between now and November 2012--which are certain to change in the 12 months ahead. During that time, countless factors could affect the prospects for Obama's reelection. The economy could recover or get worse,

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  • The health care debate: popularity, probability, and facts

    Late last week, the Kaiser Family Foundation released a poll showing that Americans have little confidence in the landmark health care reform that President Obama signed into law last year. The Kaiser survey found that just 18 percent of respondents believed that the Affordable Care Act would improve their circumstances; 31 percent said they'd be worse off, while 44 replied that the Act wouldn't make much of a difference in their lives.

    With these findings in view, it's certainly no shock that the Kaiser poll also discovered that a majority of Americans--51 percent--take an unfavorable view of the 2010 health-care overhaul, compared to just 34 percent who viewed the measure favorably. These numbers marked a new low in public support for the law, so the Kaiser survey garnered a great deal of media attention.

    Political leaders and lawmakers of course do well to heed such trends, since the public's views shape both their own immediate career prospects and the likely course of modification

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  • Accuser’s press conference cuts Herman Cain’s odds in half in prediction markets

    Sharon Bialek, the fourth woman to allege that Herman Cain sexually harassed her--and the first to do so live on television--spoke to the news media on Monday. Bialek's press conference appears to have cut Herman Cain's chances of winning the Republican presidential nomination almost in half.

    Just before it was announced that a woman and her attorney, Gloria Allred, would be holding a press conference Monday, the prediction markets gave Cain a 6.8 percent chance of becoming the Republican Party's presidential nominee. By the time the press conference ended, Cain's chances in the prediction markets had dropped to 3.8 percent.

    I do not know how long it will take for public opinion polls to reflect Cain's weakened position in the presidential race, but the prediction markets have spoken: There is more than a 96 percent likelihood that Cain will fall in the public-opinion polls before  Republicans cast their real votes in the 2012 primaries and caucuses.

    Cain's likelihood of winning the

    Read More »from Accuser’s press conference cuts Herman Cain’s odds in half in prediction markets
  • Taking a serious look at Newt Gingrich

    Former House Speaker Newt Gingrich has long insisted he belongs in the top tier of Republican candidates for the 2012 nomination--even in the wake of campaign staff implosions and embarrassing reports of his free-spending patronage of Tiffany's.

    And as Gingrich gains noticeable momentum in the polls, the prediction markets are also starting to take him more seriously. Gingrich's stock in prediction markets such as Intrade has been gaining ground over the past few weeks, but took a sharp upward turn on Monday as the media broke a round of damaging allegations about Herman Cain: claims of sexual harassment dating to Cain's 1990s tenure at the National Restaurant Association, together with reports of campaign fundraising violations.

    In the short term, the unorthodox Cain campaign has yet to show signs of flagging in the face of the charges--a new Washington Post/ABC poll shows him essentially tied with Mitt Romney atop the GOP field. But a look at the larger picture via the prediction

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  • David Rothschild Bio

    David Rothschild, Ph.D.David Rothschild is an economist at Yahoo! Research. He has a Ph.D. in applied economics from the Wharton School of Business at the University of Pennsylvania. His dissertation is in creating aggregated forecasts from individual-level information. He has written extensively, in both the academic and popular press, on polling, prediction markets, and predictions of upcoming events. He has academic papers that cover the following interest areas: political economy, behavior economics/public opinion, public economics/public policy, industrial organization, and experimental economics. On The Signal he will be blogging about economics and politics, overseeing all of the prediction and sentiment models, and coordinating with a vast team the creation of prediction games for you to play!

    Education
    2006-2011 (graduate): University of Pennsylvania's Wharton School of Business … Ph.D. in Applied Economics (Business and Public Policy Department)
    1998-2002 (undergraduate): Brown University

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  • Can Rick Perry afford to lose in Iowa?

    Is the Iowa caucus a make-or-break moment for Rick Perry's presidential campaign?

    That's what the Intrade prediction markets suggest. The traders handicapping the GOP presidential field on Intrade give Perry a 23.4 percent chance of winning Iowa, while fixing his overall shot at the nomination at half that likelihood--a mere 12.1 percent.

    Iowa is the first contest on the 2012 primary calendar--and while Perry, like all the candidates in the field, faces several possible scenarios in Iowa, I will focus on the simplest outcomes: Either he wins, or he loses.

    On paper, of course, Perry could absorb a defeat in Iowa without it turning into a fatal blow. After all, Iowa distributes less than 1 percent of delegates to the Republican National Convention. And across the board, the RNC assesses delegates on something close to a proportional basis--meaning that Perry's home state Texas, for example,  which has delivered him the governorship by impressive margins, weighs far heavier in the balance than a less-populated state such as Iowa or New Hampshire do. Nevertheless, because Iowa is first, it plays an outsize role in shaping the race's momentum--and in media horse-race accounts of who's up or who's down in the battle for the nomination.

    So consider the fallout from a Perry loss in Iowa--which Intrade predicts at an imposing 76.6 percent likelihood. Prediction markets place Perry's shot at a victory in the New Hampshire primary, slated to come on the heels of the Iowa caucus balloting, as all but negligible. In the wake of an Iowa loss, Perry's already dismal New Hampshire numbers would only decline further.

    And consider, by contrast, what an Iowa win would do for Mitt Romney, who currently shares frontrunner status in the field with Herman Cain. Intrade shows that a Romney victory in Iowa would send his already strong likelihood of prevailing in New Hampshire--which is just one state over from his home state of Massachusetts--from 83.3 percent to north of 90 percent. So a win in Iowa would essentially give Romney back-to-back victories going into South Carolina.

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  • Romney is the likeliest nominee, but Perry is stronger than you think in Iowa, according to predictions markets

    The early caucuses and primaries in the presidential nominating process are sometimes as much about expectations as they are about winning. If a candidate does not campaign very much in a state, a numerically unimpressive finish might be considered a surprisingly strong showing by the pundit class. And if a candidate is expected to do poorly but finishes second--as Bill Clinton did in New Hampshire in 1992--that can propel him or her to future victories in states with larger numbers of delegates.

    With ten weeks to go before the Iowa caucuses, where the first votes will be cast in the 2012 Republican presidential campaign, the expectations among political analysts of how each candidate will perform in January and February are beginning to harden.  Here is a quick look at how Intrade's prediction markets handicap the first five contests: Iowa, New Hampshire, South Carolina, Florida and Nevada.

    Mitt Romney is considered the likely winner of each one of these contests, but the judgment of the markets in two of the first three--Iowa and South Carolina--is extremely close. As the likely winner of the first five caucuses and primaries, Romney is, not surprisingly, also the likely winner of the Republican nomination. As of today, the markets give Romney about a 2 out of 3 chance of heading up the Republican ticket in November.

    The Iowa caucuses, however, are a toss-up, a statistical dead heat among Romney (about a 30 percent chance of winning), Rick Perry (about 26 percent) and Herman Cain (about 25 percent). Iowa is also, so far, the best opportunity for Michele Bachmann and Ron Paul to make a surprise showing. The winners of August's Iowa straw poll are each given about a 9.5 percent chance of winning the state's first-in-the-nation caucuses by the prediction markets.

    As I have discussed before, the predictions markets sometimes disagree with recent polling. Perry has languished in the single digits in Iowa lately, but the markets still regard him as a strong contender.

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  • Choosing the Right Prediction and Predictor in the U.S.’s Ongoing Debt Crisis

    This summer's debt ceiling crisis has come and gone, but the debt crisis continues. Congress narrowly avoided a government shutdown at the end of September and the prediction market Intrade now points to a non-negligible likelihood of a government shutdown at the end of the year.

    Reporters have cited a great deal of data surrounding the debt controversy, but few news outlets did a good job delineating what the data was predicting. So it was hard for most people following the issue to determine which data they should be following, or which data mattered.

    Much of the core confusion surfaced at the height of the battle over the debt ceiling. Media coverage essentially conflated four key questions with each other. First, would the debt ceiling be raised? Second, would  the major credit agencies downgrade the paper that the United States held on its debt? Third, would the crisis make it more expensive for the United States to borrow money (i.e., higher interest rates) in either the short or

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  • Herman Cain’s star is rising–everywhere but in the prediction markets

    Herman Cain is rising in the polls of Republican primary voters, but prediction markets are not buying into the Cain surge. On Wednesday evening, MSNBC led its web page with the breaking news that the network's latest poll showed Cain atop the GOP presidential field, with 27 percent support; Romney was a close second at 23 percent, and Rick Perry placed third with 16 percent. (The survey's stated margin of error is plus-or-minus 5.35 percent for questions involving Republican primary voters.)

    This is the latest in a string of strong polls for Cain, but in an aggregation of recent polls, Real Clear Politics still puts Cain in second place behind Romney. In RCP's poll summary, Cain has 19.3 percent to Romney's 22.0 percent, and Perry trails behind the pair with 14.2 percent. So, while one poll does not mean that Cain is now actually leading the Republican field, an aggregation of many polls convincingly shows that he is currently near the top of the GOP race.

    Yet the prediction markets,

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