Blog Posts by David Rothschild, Yahoo! News

  • Gingrich makes small but significant climb in odds of winning nomination

    Newt Gingrich has won the South Carolina primary, elevating him to a 25 percent chance to win the Republican nomination in online futures markets. This is the first serious assault we've seen on Romney's once iron grip on this particular set of markets in months, which have barely wavered until tonight in their conviction that he will eventually win the nomination. Still, he continues to be the heavy frontrunner with about a 2 in 3 (66 percent) likelihood of gaining the nomination.

    Likelihood of Republican Nomination for President_Jan 21a

    Sources: Betfair and Intrade

    There are several reasons why Romney still has a serious lead over Gingrich. First, he has a larger national organization and more money. Second, he has an institutional advantage of an early start; Gingrich was unable to even get on the Virginia ballot, where he lives, as he surged too late to focus on ballot access. Third, the markets assume that Gingrich is still un-vetted by the current Republican electorate. He is more likely to have negative surprises for voters as they

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  • The real reason no one impersonates dead voters: High risk, little benefit

    James O'Keefe (AP / Bill Haber)

    In an effort to demonstrate that the specter of voting fraud in America is real, the conservative agitator James O'Keefe and his group Project Veritas recently sent a handful of people into a voting center during the New Hampshire primary to obtain ballots on behalf of dead registered voters. (You may remember O'Keefe as the guy who dressed as a "pimp" in an undercover ACORN sting, or who made so much trouble for NPR.) Several were successful, as a selectively edited video from Project Veritas spoon-fed to the Daily Caller demonstrates.

    The trend throughout the United States is to enact new laws that will make photo IDs a prerequisite for participating in the democratic process. Proponents of voter ID laws use voting in lieu of dead people as the main example of fraud, while opponents point out that there is no evidence of widespread fraud and significant evidence that such laws make it more difficult for students and those in lower-income brackets to vote. Lawmakers in South Carolina used the accusation that 957 dead people voted in the "recent elections" as proof of the need for voter ID laws—a claim the New York Times' Andrew Rosenthal points out is very poorly supported. (The Justice Department has blocked the measure in South Carolina, so voters on Saturday will not need a photo ID to vote.)

    But surely by accident, O'Keefe has actually given use some extremely valuable data about the cost-benefit of trying to vote on behalf of a cadaver. Of the handful of people O'Keefe sent into voting centers to vote as dead people, at least one was recognized as being an imposter. It is unclear how much trouble he or the rest of Project Veritas will end up in since they did not actually cast the ballots they obtained; TPM reports that merely obtaining the ballots fraudulently could violate federal law as well, even if no voting took place. Project Veritas refused to tell me how many people participated in their stunt, but I can be extremely conservative and say that voting for a dead person carries at least a 1 in 100 risk of being recognized and possibly ending up in legal trouble.

    Based on the most conservative estimates, then, we can estimate that voter ID laws could disenfranchise between 10,000-500,000 eligible voters for every 1-100 blocked fraudulent votes. Here's how I get there:

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  • Romney nosediving in South Carolina as Gingrich surges

    Just yesterday, the political prediction markets gave Mitt Romney an 85 percent chance of winning Saturday's primary in South Carolina. With this morning's news that Rick Perry is dropping out and endorsing Newt Gingrich, Gingrich appears to be consolidating the anyone-but-Romney vote. (This in spite of the fact that Santorum is now the officially winner in Iowa by 34 votes as of today, and has the backing of evangelical Christian leaders.)

    At present writing, South Carolina's primary is now a dogfight between Romney at about 60 percent and Gingrich at 40 percent, according to prediction market data. Just three days ago, prior to Monday's Fox debate, Gingrich was below 10%, just above Santorum:

    Likelihood of South Carolina Victory_Jan19

    Sources: Betfair and Intrade

    Romney's position has been comfortable so long as Gingrich, Santorum, and Perry have split the non-Romney vote. (More about how Paul fits in momentarily.) His hope was that there would be no consolidation prior to South Carolina, where he will only win with a

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  • Running Out of Alternatives to Romney

    With Jon Huntsman's exit from the Republican primary race there are five main candidates left, and Mitt Romney holds a commanding lead among them with a 89.1 percent chance of gaining the Republican nomination, according to prediction market data. Ron Paul follows him at 4.1 percent, Newt Gingrich at 2.5 percent, and Rick Santorum at 1.2 percent. Since the dust settled in New Hampshire, Romney has slowly drifted upwards in his likelihood of winning the Republican nomination as it becomes more likely there would be no coalescing around a single challenger in South Carolina.

    Likelihood of Republican Nomination for President_Jan 16

    Sources: Betfair and Intrade

    Huntsman's exit had little impact on the expected outcome of race, as there was little expectation that he would ultimately prevail after his third place finish in New Hampshire. Yet, it may have had a short term impact, making it just a little easier for Romney to become the presumptive nominee after South Carolina by leaving Romney as the lone moderate in the race compared to the

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  • For Romney, Iowa and New Hampshire Were Meaningless

    Mitt Romney went into Iowa as the heavy favorite to win the Republican nomination and he leaves New Hampshire in the same position. Unlike the see-saw like swings in the Democratic nomination battle of 2008 or the steady movement in the Republican nomination battle of 2008, all of the candidates' positions remained relatively static during the entire period surrounding these first two primary contests.

    Considering the following chart, which shows the market-based odds over the course of the Iowa and New Hampshire contests for both this and last cycle:

    Likelihood of Republican Nomination for President_Over Iowa and New Hampshire-with color

    Hat Tip: Eric Zitzewitz, Associate Professor of Economics at Dartmouth, for working with me on the idea for the post and the table. Sources: Betfair and Intrade

    In the 2008 Democratic primary contests, Barack Obama's likelihood of gaining the nomination rose with his victory in Iowa and sunk with his loss in New Hampshire, eventually settling a little higher than he started. Obama peaked between the two contests, as expectations rose that he would carry New Hampshire and sweep to victory. Conversely, Hillary Clinton's likelihood of gaining the nomination went down and then recovered, eventually settling just below where she started. The main overall shift was that Obama captured most of John Edwards' likelihood of victory as he crashed with his Iowa finish.

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  • The real New Hampshire winner is the final non-Romney contender

    8:30 p.m. The expected happened tonight, so the prediction markets had no reason to move. Romney, cruising to an easy victory, is now a few percentage points more likely to win South Carolina at about 73 percent, and still about 80 percent likely to win the nomination.

    Ron Paul's strong second place finish did nothing to convince the markets that he can beat Romney for the nomination. Yet, Paul is going fight all the way to the convention and he is going influence the election in two ways. First, he is going to continue to have a 15-20 percent likelihood of running as a third party candidate. Second, because of that specter hanging over the Republicans, he will have a huge opportunity to influence the Republican platform.

    Huntsman's likelihood of competing for the nomination is plummeting towards negligible with his third place finish. He is still not competing in South Carolina and his last bastion is Florida, if he can keep his campaign going until then.

    The main question is the jockeying for the anyone-but-Romney position between the two Palmetto sweethearts. Both Newt Gingrich and Rick Santorum benefit from Huntsman's third place finish, but they suffer from the weight of an even stronger Romney. Gingrich is slightly ahead of Santorum in New Hampshire and is slightly more likely to carry South Carolina.

    4:56 p.m. Mitt Romney is heavily favored to win both the New Hampshire primary and, eventually, the Republican nomination. Utilizing prediction market data, Romney has a 97.3 percent likelihood to win the New Hampshire primary and an 80.0 percent likelihood to win the nomination. Those are great odds for the former Massachusetts governor, but they are not absolute. Here are a few things to remember if you're banking on that other 20 percent.

    1. Don't Count on Ron Paul. Paul currently has the best likelihood to come in second place in New Hampshire. But his likelihood to finish first or second, currently at 54.8 percent, has been trending downward fast over the last few days. More importantly, the market's confidence in his ability to compete in South Carolina plummeted as soon as it appeared that he would not win Iowa. With his dedicated national organization, he will likely run hard through the last primary, but he will not be the anyone-but-Romney candidate.

    2. Huntsman: The Not-Romney Virgin.

    Counting Paul out leaves three candidates left to challenge Romney: Jon Huntsman, Newt Gingrich, and Rick Santorum. Of those three, Huntsman is the only one who hasn't received serious consideration, and he has a very high likelihood of finishing in the money in New Hampshire. The markets give him a 92.5 percent likelihood to finish first, second, or third, and he has been trending upward in New Hampshire over the last few days. His likelihood of finishing first or second is 44.8 percent, about 10 percentage points below Paul.

    Likelihood of New Hampshire Primary_win, place, show

    Sources: Betfair and Intrade, Click here for Live Table

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  • Santorum does not have a “Google Problem.” He has a civil rights problem.

    If you type the word "Santorum" into any major search engine, the first result you'll get is to Spreading Santorum, a site created by sex-columnist Dan Savage whose mission is to redefine the candidate's last name as a sex act--or rather, a graphic description of the result of one--and catalog his extreme position on sexual morals. If you search for "Rick Santorum," you still get this site somewhere in the top ten. (Disclaimer: Search rankings are increasingly personalized, so you might not see exactly what we do, particularly if you have strict content filter settings.)

    Santorum is none-too-pleased about this. Last September, Politico reported that he contacted Google  about having the site removed, without luck. Santorum categorized the site as "filth," and said he believed the company would remove the site from its listings if it targeted Joe Biden, for example. But if the goal of a search engine is to provide links to sites that people want to read, then the prevalence of Spreading

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  • Prediction market data provided strong guidance in Iowa

    The New Yorker's John Cassidy proclaims two big winners from the Iowa caucuses: President Obama and Justin Wolfers. He's half right:  Wolfers, an economist and fellow proponent of the prediction markets (and a co-author of mine), put his faith in the markets, which were favoring Romney, while many other prognosticators went with their gut reaction to Rick Santorum's "Big Mo." In fact, he accepted wagers of a steak dinner on his prediction with both Cassidy and Nate Silver of the New York Times. As Cassidy says, "Doubtless, he is now licking his lips and perusing the reviews of Sparks and Wolfgang's steakhouses."

    The beauty of prediction markets is that they are capable of recognizing and capturing momentum and scores of other tidbits of real-time information in their prices. This doesn't mean Wolfers was certain to be correct. Even though Romney did win and it is fun to gloat, the actual outcome of the caucuses was a toss-up--no one is arguing that the markets are so good that they

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  • Iowa: About as expected

    Mitt Romney went into the Iowa Caucus night favored to win the Republican nomination with about 77 percent likelihood; he will catch his flight to New Hampshire with just about the same odds. We still don't know whether he will eke out a victory in Iowa, but it simply isn't important. He survived Iowa, and that's what the market cares about.

    Likelihood of Iowa Caucuses_Jan 3 at 11_59 PM

    Sources: Betfair and Intrade

    Rick Santorum went into the night with decent odds of victory and a high likelihood of finishing first or second. He met those expectations, and the market rewarded him with the same expectations they've always afforded him: Very low ones. He lacks money, a national organization, and has yet to get traction with the general Republican electorate.

    The same is true of Ron Paul: Many expected him to place first or second. He very nearly did, and the only effect of his near-miss was a slight downward shift in his odds of winning a few early states.

    Newt Gingrich came into the Iowa caucuses severely weakened by attack ads

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  • What do Iowa results mean? In the end, not much.

    It's easy to obsess over the Iowa caucuses results, given how long we've all be waiting for actual voting to take place, but if there's any lesson from the markets it is that tonight will not have a huge impact on the final outcome of the primary. Iowans may fancy themselves kingmakers, but right now it appears the best they can hope for is to be King of South Carolina makers.

    Mitt Romney went into the evening with a very high likelihood of victory in Iowa, and it doesn't appear that he will drastically underperform tonight. (With about 90 percent of votes recorded at press time, he's neck-and-neck with Rick Santorum and just a few percentage points ahead of Ron Paul.) Still, a stronger-than-expected showing in Iowa, does keep both Paul and Santorum viable in South Carolina. A strong victory by Romney in Iowa, which is unlikely at this point, might have knocked these Anti-Romney candidates out early.

    Likelihood of Iowa Caucuses_Jan 3 at 10_27 PM

    Sources: Betfair and Intrade

    Surprisingly, the tight race has only barely dinged the

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