Thursday, May 06, 2010

Google Trends, Polls, Betting, Prediction Markets and the British Election

Those interested in Google Trends may find it worthwhile to bear the first chart (directly below) in mind, as the results of the British Election come through. The red line represents "Gordon Brown", the orange line "Nick Clegg", and the blue line "David Cameron".

A different picture is illustrated in the second chart (directly below). The red line represents "Labour Party", the orange line "Liberal Democrats", and the blue line "Conservative Party".

Of course, this type of information may have no predictive value. The UK Polling Report (an independent survey and polling news website) shows that the majority of polls paint a closer picture, but with a distinct lead for the Conservative Party. Could the higher search (and news) reference volume for "Gordon Brown" be due to an incumbency effect? Could the higher search (and news) reference volume for "Liberal Democrats" be due to a novelty effect? Of course, we can't attempt an answer until later in the week. Many punters have already placed their bets though: bookmakers estimate that up to £40m will have been bet on this election, smashing previous records.

Finally, the Intrade prediction market indicates that the Conservative Party have roughly a 90% chance of winning, as shown in the third chart (directly below).

The Inkling Prediction Market indicates here that there is a 66% chance of a hung parliament, and a 32% chance of a win by the Conservative Party.

Hal Varian, Chief Economist at Google, discusses prediction markets here in the NYT, from a few years ago. The emphasis in the article is on the "Pentagon-sponsored futures market in terrorism indicators (that) was announced and squashed in all of two days."


Liam Delaney said...

The Gordon Brown bounce comes from the bigot remarks thing. Shows that people are more interested in cringe than policy when it comes to search. Some day an unfortunate politican is really going to let loose when a microphone is turned on and then you will see search volumes. I have to agree with John Waters when he says that Brown was lucky in a way. For most people when we let loose in frustration our language is a lot more colourful than the language Brown was using. The woman is question was right to feel hurt but I dont think anybody other than very saintly people do not use moments like the back of the car following a frustrating encounter to vent.

Martin Ryan said...

Good point about what was behind the 'Gordon Brown bounce' Liam. As we've mentioned before, one really has to reflect on what is underlying "search". In this case, there is an interesting behavioural aspect (I use that phrase out of habit; I know there is a good debate happening on a separate thread about behav econ!). The behavioural aspect, as I see it, is that many individuals were 'sensation-seeking' rather than 'information-seeking', when it came to their search behaviour in this case.