Sunday, November 2, 2014

Going for the Democrat outsider in the US Senate race

I am normally a favourite backer when it comes to elections. My experience suggests that the market on elections tends not to get the favoured party in short enough quickly enough.
So what am I doing on the US Congressional elections? Breaking my habits of a life time and going for the outsider in the Senate race.
The reason for my modest risk taking on the Democrats surviving as the majority party in the Senate comes from a couple of recent articles by Sam Wang on The Princeton Election Consortium website.
Midterm National Senate Polling Error Is Five Times Larger Than In Presidential Years and Races I’ll be Watching on Election Night  outline what Wang calls “the mid-term polling curse” whereby historically, in any given year, midterm polls have been off in the same direction by a median of 2 or 3 percentage points.
Depending on the year, either Democrats or Republicans end up outperforming polls. In current poll medians, six races are within less than 2 percentage points: Alaska, Colorado, Georgia, Iowa, Kansas, and North Carolina. Therefore all six of these races could be won by Republicans…or all six could be won by Democrats.
The other races total 48 Republicans and 46 Democrats/Independents. Republicans are slightly favored to take control, since an even split of the six close races would give them the 51 seats they need. However, the likely possibilities range anywhere from a Republican majority of 54-46 to a Democratic majority of 52-48. As of today, cranking through the math and the uncertainties gives a probability of 55% for a Republican takeover.
That seems a good enough reason to me to recommend an interest on the event.
Some of the British bookies are offering $8.50 about the Democrats (plus independents who decide to caucus with them) being in the majority and that would suit me just fine. In Australia Betfair offers the three options of Democrat, Republican and neither (where caucusing independents are not counted with one of the major parties). So, $20 at the $8.50 to make election watching more fun.

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