Labor woes in perspective

Has Latham really gone backwards since October 9? One indicator is the betting markets – where Labor’s odds of winning the 2007 election are unchanged since October 11 (Coalition pays $1.33, ALP pays $3.00, suggesting that the bookies think Labor is a 31% chance to win next time around). Of course, the market might be illiquid, but a big change in Labor’s chances of winning the next poll would likely have shown up in the odds. As to polls on Labor’s performance – such as yesterday’s Newspoll – Justin Wolfers and I found in our 2002 paper that polls taken more than a year prior to election day have no predictive power. So the Opposition could do just as well by ignoring all polls for another 22 months or so.

In more imminent betting news, Fiona Wood is favourite for Australian of the Year (40% chance), with Nicole Kidman close on her heels (33% chance). And Blair remains a strong favourite for next year’s British election (Tories just an 18% chance).

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2 Responses to Labor woes in perspective

  1. brian says:

    The Bookies are smart, who knows what lies ahead economically, politically domestically and overseas. It is also quite possible that labour will reform its Organisational wing and put some decent candidates forward with actual policies, over the coming 3 years. Then factor in the Leadership question. the wise money will stay in punters pockets and wait and see what 2005 brings.

  2. Bryan Palmer says:

    Andrew, to bet against Labor at the moment you would have to think that not only are Latham’s chances poor, but the chances of all the potential replacements are just as poor or poorer. Given the high level of uncertainty in respect of potential replacements, I suspect that the market is, as you suggest, illiquid.

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