NEWS | MYCAREER | DOMAIN | DRIVE | FINANCE | CITYSEARCH

member centre | login

<SCRIPT LANGUAGE="JavaScript1.1" SRC="http://campaigns.fairfax.com.au/js.ng/Params.richmedia=yes&site=afr&adspace=468x60&cat=section.section&ctype=index&loc=top&reportheading=afr"> </SCRIPT> <NOSCRIPT> <A HREF="http://campaigns.fairfax.com.au/click.ng/Params.richmedia=yes&site=afr&adspace=468x60&cat=section.section&ctype=index&loc=top&reportheading=afr"> <IMG SRC="http://campaigns.fairfax.com.au/image.ng/Params.richmedia=yes&site=afr&adspace=468x60&cat=section.section&ctype=index&loc=top&reportheading=afr" HEIGHT="60" WIDTH="468" BORDER="0" /> </A> </NOSCRIPT>

Home  |  Register
|  Subscribe  |  Help  |  Feedback  |  Portfolios

Legend: = premium
|  Logout

MARKET
WRAP

· Equities

· Money

· IPOs

· Commodities

COMPANIES

FINANCIAL
SERVICES

PROPERTY

· Residential

I.T.

AUSTRALIA

ASIA

WORLD

WORLD BUSINESS

COMMENT &
OPINION

SMART MONEY

WEEKLY
SECTIONS

· Enterprise

· Legal
Affairs

· Professions

· Marketing

· Government

· Perspective

· Review

· Colour
Magazine

· Life &
Leisure

· Education

SPECIAL
REPORTS

SPORT

MULTIMEDIA

MARKET TOOLS

· Quotes &
news

· Portfolios

· Portfolio summary

· Portfolio
summary/alerts

· Watchlists

· Australian indicies

· Market movers

· Warrants

· Derivatives

· Sectors
(GICS)

· Brokers'
tips

· Share tables

· IPO
listings

ARCHIVE

COMPANIES
A-Z

RESEARCH

SITE
SERVICES

AFR
SHOP

AFR
EVENTS

ABOUT US

SITE
MAP

RELATED SITES
AFR
BOSS

AFR
Mag awards
Executive jobs

AFR
Photos

BRW

CFO

MIS

MoneyManager

Personal Investor

Shares

Tradingroom

Fairfax
Research

Quick Search
| Advanced Search
| Browse Archives

Print Entire Page

Pollsters at odds with simple probabilities

Author: Andrew Leigh and Justin Wolfers
Date:
07/10/2004
Words: 568
Source: afr

Publication: Financial Review
Section: Comment
Opinion

With the federal election almost upon us, the most important
number in Australian politics today must surely be the probability
that Prime Minister John Howard is re-elected. So is this the number
that the polls report?

Unfortunately not. Instead of calculating the simple probability
of victory for each candidate, pollsters report to us just what we
tell them: the proportion who say they plan to vote for each
candidate.

It is left to the rest of us to work out what to make of a 3per
cent lead in a poll with a 2per cent margin of sampling error.

Yet by using simple statistics, pollsters should be able to take
the results of their poll and the margin of error, and tell us how
confident they are that each candidate will win.

Suppose two polls each find that 52per cent of their respondents
plan to vote for Howard, and 48per cent plan to vote for Opposition
Leader Mark Latham, but one has a sample size of 500, while the
other has a sample size of 2000.

Obviously, the pollster with the larger sample is more confident
that Howard will win. But by how much?

According to standard statistical tables, the smaller poll would
make one 81per cent sure that Howard would win, while the larger
poll suggests confidence in the forecast as high as 96per cent.

Combining the two polls would make one even more certain - giving
a 98per cent likelihood that Howard would be re-elected.

Turning polls into probabilities is akin to what meteorologists
do every day. Rather than tell us about what their instruments are
recording, and how accurate they think they are, weather forecasters
produce a single number - the percentage chance that it will rain on
any given day.

What do the latest polls tell us? ACNielsen says Labor is a 7per
cent chance, Galaxy rates Labor a 10per cent chance, Morgan
indicates that Labor is an 83per cent chance and Newspoll gives
Labor a 34per cent chance. Weighting the four polls by their sample
sizes, they together suggest Labor has only a 12per cent chance of
winning.

Of course, this requires us to believe that the polls are as
precise as the pollsters say; if not, Labor is probably a better
chance than 12per cent (indeed, Centrebet rates it a 23per cent
chance).

While these numbers take the pollster's estimates of their errors
at face value, there are other types of polling error that go beyond
random statistical error. Poll samples may be skewed towards a
particular kind of voter. "Don't knows" may not be representative of
all other respondents.

And, as Kim Beazley can testify from 1998, our electoral system
makes it possible to win 51per cent of the two-party vote but lose
the election.

Yet even with these other problems, existing poll results can
still be better presented. It's time for the pollsters to follow the
meteorologists, and start talking probabilities.

Andrew Leigh is in the research school of social sciences at
the Australian National University. Justin Wolfers is an assistant
professor at the Wharton School, University of Pennsylvania.

Back

Fairfax Digital
Privacy Policy | Conditions of Use | Member
Agreement | Copyright

member centre | network map | mobile | advertise with us | place a
classified ad

SMH | THE AGE | AFR | http://mycareer.com.au/ | http://www.domain.com.au/ | http://www.drive.com.au/ | FINANCE | FAIRFAX NZ