InTrade.com’s Predicting Abilities

The best way to figure out politics, is always to follow the money. The political pundits relying on InTrade.com’s numbers for predicting the 2008 use that principle to their advantage.

InTrade.com is a trading exchange. Basically, the site’s membership speculates on the outcome of a number of future events (including political races) in much the same way that stockbrokers might speculate on margin or sports fans might lay down bets.

While most political operatives rely on polling data to make predictions, there is some reason to take a look at these sorts of speculative markets — they have a surprising tendency to be right.

The current bids might surprise you:

Republican Presidential Nomination
Giuliani 28.2
Romney 23.6
McCain 17.8
Huckabee 16.3
Paul 5.5
Thompson 3.7

Giuliani is in the lead, although his numbers have actually dropped off dramatically. Huckabee’s numbers have climbed immensely recently, and speculations on his nomination have been hot commodities on InTrade lately.

The American Research Group, along with a lot of other pollsters, show Huckabee in the lead. It’ll be interesting to see whether the pollsters or the speculators make the better predictions in the primaries.