Tim Harford: Hillary’s Odds

‘"Put your money where your mouth is."

‘The old taunt reflects a deep economic principle: Talk is cheap, but if someone is willing to risk money, it means they’re serious. Put the principle into action and you realize that electoral forecasters should pay as much attention to the betting odds as to the opinion polls. (Check out Slate’s Political Futures, which tracks all the political betting markets in real time.) When money is on the line, informed people, perhaps including insiders, have an incentive to turn their knowledge into cash by making big bets. In the process they make the odds more accurate. And of course, there are several reasons to lie to pollsters, but no reasons to make a money-losing bet.

‘Or are there? Imagine you’re a candidate in the presidential primaries. One of the big selling points in a primary is electability: "If you choose me, I’ll beat the other party’s candidate." It might be worth placing a few money-losing bets if they made you look electable.’ (Slate Magazine article).