Yesterday, I wrote an oped in the AFR arguing that we should have prediction markets on unemployment.
This morning comes a press release from Centrebet:
Leading financial bookmaker Centrebet has today released the country’s first market on the next national unemployment figure, with a 5.6 to 5.7 per cent jobless rate as the opening $2.85 favourite
Their odds – and the implied probabilities – are below.
Below 5.0% $15.00 4% 5.0 – 5.1% $11.00 6% 5.2 – 5.3% $7.00 10% 5.4 – 5.5% $4.00 17% 5.6 – 5.7% $2.85 23% 5.8 – 5.9% $3.75 18% 6.0 – 6.1% $6.00 11% 6.2 – 6.3% $11.00 6% 6.4 – 6.5% $21.00 3% Above 6.5% $34.00 2%
The profit margin implied by these odds is currently pretty high. Hopefully trading in this market will be sufficiently thick that it will come down.
I also hope that they’ll be able to open a market in the really policy-relevant number: unemployment in June 2010.
(xposted @ Core)
…or October/November 2010.