More on intrade

Well, I tweaked the simulations a little bit, most importantly by implementing the covariance between the states' markets to simulate their price dynamics jointly. While Obama is currently winning 273 states worth of electoral votes in intrade, most of the state markets are actually very far from 50 cents. Only 9 are between 30 and 70 cents, and 42 are practically decided in the market's mind.

STATE	CO	MI	MN	NV	NH	NM	OH	PA	VA
Obama Price	54.9	65	68.5	45	56.5	59.5	40	66	44.9
EV	9	17	10	5	4	5	20	21	13

Obama is winning 66 of these 104 right now. So while we would expect the mean of the final simulated distribution to be near 273, any random perturbation is actually more likely to hurt him than help him. No pair of these states has a magnitude of correlation higher than .4, btw.


{1., 0.1, -0.1, 0.1, 0.3, 0.1, 0.1, -0.1, 0.2},
{0.1, 1., 0.2, 0.2, 0.2, 0.1, 0.3, 0.2, 0.2},
{-0.1, 0.2, 1., 0, 0.1, 0.2, 0.1, 0.4, 0.1},
{0.1, 0.2, 0, 1., 0.3, 0.3, -0.1, 0, 0.2},
{0.3, 0.2, 0.1, 0.3, 1., 0.1, 0.2, 0, 0.3},
{0.1, 0.1, 0.2, 0.3, 0.1, 1., 0, 0.2, 0.1},
{0.1, 0.3, 0.1, -0.1, 0.2, 0, 1., 0.1, 0.2},
{-0.1, 0.2, 0.4, 0, 0, 0.2, 0.1, 1., 0.1},
{0.2, 0.2, 0.1, 0.2, 0.3, 0.1, 0.2, 0.1, 1.}


The mean of my simulation today is 254.5, but the distribution is bimodal - either a narrow victory for Obama or a big loss. Obama retains an overall 40% chance of winning the election.

It has come to my attention that Nate Silver, of Baseball Prospectus, also has a very nice approach to working with polling data. He calls it fivethirtyeight.com.