November 6, 2002

Learn from bookies
by Vanessa Williams
 
MELBOURNE-Cup-style punting would be better at predicting the outcome of the Victorian election
 than polling, a researcher has said.

Just as a horse's odds go down when a whale punter puts money on it, so do a political party's as election
bookies read the odds. Assistant professor Justin Wolfers, of the Graduate Business School, Stanford
University, said the betting ring was more accurate because people were forced to "put their money where
their mouth is".

The US-based economist and political scientist, who used to work for a bookmaker in his native Australia,
said voters could lie or change their minds in polls.

"But when you have to put your money where your mouth is, you really do carefully take account," he said.

"Money doesn't lie, people do. And the thing is, polls rely on people, betting markets rely on money."

Last year, Professor Wolfers analyzed the Australian federal election and found Centrebet was more accurate
than either polling or economic modeling in predicting the Liberal Party victory.

Vanessa Williams.