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University of Iowa News Release

 

Oct. 26, 2010

IEM trading sees Democrats holding U.S. Senate, GOP taking House

One week before the Congressional election and traders on the Iowa Electronic Market (IEM) still see a Republican takeover of the House of Representatives, but have pulled back on their assessment of a GOP sweep.

As of Tuesday morning, traders on the real money market operated by the University of Iowa’s Tippie College of Business believe that a Republican House and Democratic Senate is the most likely result of the election. Contracts were trading at 72 cents on the IEM’s Congressional Control market, meaning traders believe there’s a 72 percent probability of a split Congress.

The contract for a Republican sweep were selling at 15.3 cents, representing a 15.3 percent probability. That contract was selling for as high as 32 cents on October 12 before coming back to its current price.

The price of a contract representing continued Democratic control of both houses was selling at 11 cents.

Meanwhile, on the IEM’s Florida Senate market, traders believe Republican Marco Rubio is the likely winner, giving him a 91.6 percent probability of winning. Independent candidate Charlie Crist is selling for 5.7 cents, and Democrat Kendrick Meek is selling for less than 1 cent.

The Florida Senate vote share market predicts Rubio will win 52 percent of the vote, Crist will win 29.9 percent and Meek 22.4 percent.

The Iowa Electronic Markets is operated by the University of Iowa’s Tippie College of Business as a real-money futures prediction market. Begun in 1988, the IEM is a research and teaching tool that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.

Up-to-the-minute prices for the Congressional Control market can be found online at http://iemweb.biz.uiowa.edu/quotes/Congress10_quotes.html. Florida market prices can be found online at http://iemweb.biz.uiowa.edu/quotes/348.html for the Winner Take All Market and http://iemweb.biz.uiowa.edu/quotes/347.html for the Vote Share Market.

The UI Office of University Relations offers a website for journalists covering politics at http://www.uiowa.edu/election/. The site features bios, photos and contact information for UI political experts, along with news about IEM standings, the Hawkeye Poll, and UI connections to the state’s first-in-the-nation caucuses.

STORY SOURCE: University of Iowa News Services, 300 Plaza Centre One, Suite 371, Iowa City, Iowa 52242-2500

MEDIA CONTACT: Tom Snee, University News Service, tom-snee@uiowa.edu, 319-384-0010 (office), 319-541-8434 (cell)