How Good Are Lobbyists at Predicting the Future?

Intrade is known as one of the great success stories of the forecasting world. It is apparently as good as or better than most conventional sources of political forecasting – and certainly better than the notoriously low accuracy rates of the professionals.

Intrade has a lot going for it beyond the usual crowdsourcing bump. People using Intrade put a financial stake in their forecasts not observed in the low turnover-/ low punishment-rate field of political journalism. And if it’s anything like professional exchanges, its users are better-paid, better-educated and better-connected in political decision-making circles than, say, journalists. But here’s a question: what if we compare that population to a similar population, like K Street lobbyists?

It is well-established that lobbyists tend to bet on the winning team. But are they better at it than Intrade users? Wittman provides an interesting hypothesis:

[In election markets,] interest group endorsements are like signals in the market and provide strong cues about candidates’ preferences. Furthermore, competitors for public office need provide only the information when there are discrepancies between the voters’ preferences and the political outcome, not all the unnecessary detail.

Intrade might work well because its users are the first to know from interest groups. I smell a series of network analyses, and maybe a fun ANOVA comparison or two. Anyone know of data on Intrade demographics?!

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