Justin Wolfers is quoted in Tuesday's Washington Post offering insight into betting markets and how they historically underrate the chances of big favorites in elections.
According to the article, “The math is clear: Hillary Clinton has better odds of becoming president than anybody else — by far,” Clinton not only remains the overwhelming favorite to win the Democratic nomination, but PredictWise data suggests she has a 47 percent chance of winning the 2016 general election.
In regards to these odds, Wolfers explains that these online betting markets often underrate the chances of big favorites to win elections and that this may be the case with Clinton.
“History suggests that Clinton is substantially more likely to win the nomination than markets currently suggest. The bias may be as large as ten percentage points, suggesting that she's an 85 percent chance to win the nomination,” said Wolfers.
“As to whether the Democratic or Republican nominee will win the race, bookies currently give the Democrats a slight edge — suggesting that they've around a 55 percent chance to win, versus 45 percent for the Republicans—My back-of-the-envelope correction suggests that maybe the true odds are 58 percent instead. Put these numbers together, and there's about a 49 percent chance that Mrs. Clinton is our next President.”
Justin Wolfers is a professor of public policy at the Ford School and a professor of economics in the Department of Economics. Wolfers' research interests include labor economics, macroeconomics, political economy, economics of the family, social policy, land behavioral economics.