Romney’s odds in Ohio climbing steadily (Originally posted on Yahoo!'s "The Signal" Blog)

The chart shows the progression of the likelihood of victory in Ohio since the morning after the last round of primaries. This is a great example of the value of prediction markets. The markets were able to adjust quickly, in real-time, to new information. They are also able to incorporate more information, like Romney's upward momentum in Ohio and his superior organization:

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Romney goes for the kill on Super Tuesday (Originally posted on Yahoo!'s "The Signal" Blog)

We have held all along that Mitt Romney will be the Republican Party's nominee for president. Since his double win last week in Arizona and Michigan, his odds in the prediction markets have jumped above 80 percent. That's likely to go up again after Super Tuesday, since the most likely scenario has Romney winning 7 of the 10 states, Rick Santorum taking 2, and Newt Gingrich winning his home state of Georgia.

The question is whether voters in future primaries decide the race is effectively over after Tuesday and flock to Romney, or whether Santorum lives to fight another day in the polls. A big-enough night for Santorum could prolong his eventual defeat, since polls tend to be more short-sighted than markets. Here are the odds for his odds in today's individual elections.

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Romney has no chance in Massachusetts in November, forget my prediction (Originally posted on Yahoo!'s "The Signal" Blog)

I'd like to examine one rather glaring error in the fundamental model for elections I have created with Patrick Hummel and explain why we're not going to fix it: Massachusetts stands at 74.4 percent likely to go to Obama, while all external signs dictate that it is a much safer bet for the Democrats. This is because we currently assume Mitt Romney will win the nomination, as the prediction markets suggest.

There is overwhelming empirical evidence that presidential candidates get abnormal returns in their home state. In 1984, for example, Walter Mondale still won Minnesota even though the other 49 states all went to Ronald Reagan. (Mondale also held down Washington, D.C.) So Yahoo! Labs' Patrick Hummel and I tested this theory with data from the last ten election cycles. We determined the size of that abnormal return, calibrated on those past races. This boost shifts Massachusetts from a Democratic lock to a Democratic-leaning state. It currently flips for Romney if Obama's approval rating falls to 41 percent, well before similar states.

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Republican nomination extends into March, Obama's likelihood of reelection up (Originally posted on Yahoo!'s "The Signal" Blog)

The longer-than-expected Republican primary has given many more voters a chance to meet the candidates and cast ballots in meaningful elections, but it has caused some in the party to worry that it is weakening the eventual winner in his confrontation with President Obama. Mitt Romney is still the heavy favorite to win the nomination, with 75.2 percent odds to Rick Santorum's 9.8 percent, but the data suggests he could be looking at a Pyrrhic victory. The president's odds of re-election jumped to above 60 percent in the days after Santorum's big wins on February 7, according to prediction markets. Since then they have steadily crept up; by contrast, Obama spent the fall and early winter hovering around 50 percent.

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Markets heavily favor The Artist for top Oscar laurels (Originally posted on Yahoo!'s "The Signal" Blog)

Some media outlets are relying on measures of positive and negative sentiment in social media to forecast the Oscars. We are big supporters of the value of social media to understand public interest and opinion. But, as of now, there is modest predictive power in these social indexes; the data is too new to properly debias it, correlate it with outcomes, and fully understand its relative merit. For example, Ron Paul has consistently dominated measures of social sentiment, but it has not translated into victories at the polls. Followers of this social sentiment index are declaring a tight race for Best Picture, whereas The Artist has an overwhelming likelihood of victory.

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Romney hoping to regain footing in markets (Originally posted on Yahoo!'s "The Signal" Blog)

Mitt Romney and Rick Santorum slugged it out tonight in Arizona, but the importance was all about Michigan. Santorum, as the frontrunner in the polls, was on the defensive for most of the night. Romney, as the actual frontrunner, was playing it safe. The strategy paid off for Romney. During the course of the debate, his likelihood of carrying Michigan rose from 66.2 percent, 15 minutes before the debate, to 73.6 percent, at the close of the debate. And, in correlation, Romney's likelihood of gaining the GOP nomination is up over 3 points on the day to 75.7 percent.

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Election hinges on New Hampshire, where Obama has 59.4%: The Signal Forecast (Originally posted on Yahoo!'s "The Signal" Blog)

As though New Hampshire wasn't already overprivileged enough in the broken primary system, the state may be the one to tip the scales in the general election to either party. According to my new elections model, which orders the states from most to least likely to go to the Republican candidate, a GOP win in New Hampshire gives the challenger 270 votes to Obama's 268. If the president wins, he carries the election with 272 votes to his opponent's 266.

Our model, which I developed with Yahoo Research economist Patrick Hummel by analyzing data from the past 10 elections, gives Obama a 59.4 percent likelihood of winning in the Granite State. This number is slightly higher than our prediction in our first post about our equations last week because the Real Clear Politics average of presidential approval polls has increased from 48 to 49 percent. The most likely outcome is still that Obama will win by 303 votes, carrying Ohio and Virginia as well as New Hampshire. As we noted before, however, elections are just as subject to chance as football games, and if the contest were held 100 times, we'd expect the Republican to win about forty times.

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Obama poised to win 12 election with 303 electoral votes: The Signal Forecast (Originally posted on Yahoo!'s "The Signal" Blog)

We'll dip into what the model says in a moment, but first a note about models in general: there are a lot of them, from complex equations generated by nerdy academics (like the work by Patrick Hummel and I seen here) to funny coincidences like the Redskins Rule, which holds that the incumbent party keeps the White House if Washington's football team wins its last home game. (This is true in 17 of the last 18 elections!) Every year, some of these models are right and some are wrong, and the difference is often just luck. As a result, models get a bad rap as being very good at predicting the past and lousy at predicting the future.

But every election gives researchers more data to work with and a better idea of what works and what doesn't. Not all models are bogus just because many of them are. Our model combines powerful scientific algorithms with both real-time and historical data sources. We have examined the last 10 presidential elections and found that our new model would have correctly predicted the winner in 88 percent of the 500 individual state elections.

The following chart shows our predictions for each state in the general election, based on this model:

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Polls now favor Santorum, the ninth flip of the nomination (Originally posted on Yahoo!'s "The Signal" Blog)

Rick Santorum has slipped ahead of the Mitt Romney in the polls, marking an ignominious milestone in the Republican nomination: Since last summer, when Romney was at the top of the early polls, the lead has switched nine times. In order, it's gone to Rick Perry, Romney, Herman Cain, Romney, Gingrich, Romney, Gingrich, Romney, and Santorum, who now leads the Real Clear Politics' aggregated trend with 30.2 percent to Romney's 28.6 percent. Notice a pattern?

The Signal continues to predict that Romney will win the nomination. According to the prediction markets, he has a 72.8 percent likelihood to win the nomination, followed by Santorum at a non-negligible 17.8 percent. That's a far more vulnerable position for the former Massachusetts governor than he found himself in a few weeks ago, but it's still an uphill battle for Santorum. On the following chart, the vertical line represents when the first polls closed on Tuesday, February 7, when Santorum won three primary states (two for delegates and one beauty contest).

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Santorum surging in Minnesota, but Romney’s biggest worry is now Obama (Originally posted on Yahoo!'s "The Signal" Blog)

Regardless of what happens tonight, Romney is still the heavy favorite to win the Republican nomination at 84.5 percent. That numbers assumes that he will likely lose in Minnesota and has a non-negligible likelihood of finishing third or even fourth in Minnesota.

The main result of Romney's struggles against the Republican field has not been a lowering of his likelihood of winning the nomination, but a lowering of his likelihood to win the presidency conditional assuming he wins the nomination. Romney's conditional likelihood of victory against Barack Obama has hit its lowest point since the campaign began in earnest this summer. He is just 41.0 percent likely to defeat Obama, should he face him as the Republican nominee. If it's any consolation, this is still higher than his Republican challengers.

Thus, it is not surprising that Obama has hit his recent high point, at 60.1 percent; this is his first time being above 60 percent for reelection since June. Not only does his likely Republican challenger appear to be a weakened candidate, he has had a string of news that boosts his likelihood regardless of his opponent. First, economic indicators are moving in the upward. Second, his job approval rating continues to climb; it is now 48.6 according to the latest aggregated trend on RealClearPolitics. This upward movement likely reflects that positive economic trend.

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