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Why We Need a Better Approach
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Why We Need a Better Approach
“…will decide this weekend”
“McCain by half a point”
“Too close to call”
“Obama-Biden”
“Too close to call”
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Why We Need a Better Approach
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Why We Need a Better Approach
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Why We Need a Better Approach
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Why We Need a Better Approach
Why We Need a Better Approach
Why We Need a Better Approach
Why We Need a Better Approach
Obama +5.0 Colorado Romney +3.0Obama +2.3 Florida Romney +5.3Obama +6.3 Iowa Romney +1.0Obama +8.0 Michigan Obama +0.8Obama +7.0 Nevada Obama +1.7Obama +6.4 New Hampshire Romney +1.7Obama +2.0 North Carolina Romney +6.7Obama +5.3 Ohio Romney +1.0Obama +7.7 Pennsylvania Obama +2.0Obama +5.3 Virginia Romney +3.3Obama +8.0 Wisconsin Obama +0.7
Cherry-Picked Obama Polls Cherry-Picked Romney Polls
Why We Need a Better Approach
Obama +5.0 Colorado Obama +5.4 Colorado Romney +3.0Obama +2.3 Florida Obama +0.9 Florida Romney +5.3Obama +6.3 Iowa Obama +5.8 Iowa Romney +1.0Obama +8.0 Michigan Obama +9.5 Michigan Obama +0.8Obama +7.0 Nevada Obama +6.7 Nevada Obama +1.7Obama +6.4 New Hampshire Obama +5.6 New Hampshire Romney +1.7Obama +2.0 North Carolina Romney +2.0 North Carolina Romney +6.7Obama +5.3 Ohio Obama +3.0 Ohio Romney +1.0Obama +7.7 Pennsylvania Obama +5.4 Pennsylvania Obama +2.0Obama +5.3 Virginia Obama +3.9 Virginia Romney +3.3Obama +8.0 Wisconsin Obama +6.9 Wisconsin Obama +0.7
Cherry-Picked Obama Polls Cherry-Picked Romney PollsActual Results
The FiveThirtyEight PhilosophyBasic Philosophical Principles:1. Look for consensus in the data
2. Update frequentlyToday is the first forecast of the rest of your life
3. Quantify and measure uncertainty
4. Combine theory and empiricism.Data-driven, but not reality-blind
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The FiveThirtyEight PhilosophyLook for Consensus
• Many polls are better than one.
• Many economic indicators are better than one.
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The FiveThirtyEight PhilosophyUpdate Frequently
• Forecasts are updated each day as new data comes in. However, more often than not, it doesn’t change much.
• Laypeople tend to overrate new + near data points (availability heuristic)
• Professionals sometimes get dug in and make the opposite mistake.
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The FiveThirtyEight PhilosophyQuantify the Uncertainty
• This seems to be key to people who have achieved gains in forecast accuracy:
• Weather forecasters• Gamblers
• Incentives for most “experts” discourage this.
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Quantify the Uncertainty
Levee: 51’Flood Prediction: 49’
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Quantify the Uncertainty
Levee: 51’Flood Prediction: 49’
Margin of Error: ±9’
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Quantify the Uncertainty
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The FiveThirtyEight MethodMajor Steps in Model
1. Calculate polling average in each state
2. Adjust polling average
3. Combine polling model with economic conditions
4. Simulate Electoral College outcomes
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The Economy and Elections• Weight assigned to economic component
declines as Election Day approaches.
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The Economy and Elections
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The Economy and Elections
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The Economy and Elections
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The Economy and Elections
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The Economy and Elections• We use a composite economic
index from seven variables:1. Jobs (payrolls)2. Inflation (CPI)3. Stock prices (S&P 500)4. Industrial production5. Consumption (PCEs)6. Personal income7. GDP (forecasted)
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The Economy and Elections• We use a composite economic
index from seven variables:1. Jobs (payrolls)2. Inflation (CPI)3. Stock prices (S&P 500)4. Industrial production5. Consumption (PCEs)6. Personal income7. GDP (forecasted)
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The FiveThirtyEight Method
• Wide variance in pollster quality• Only 10% of people respond to polls!• Many pollsters miss cellphone voters
• Pollsters cheat/herd off one another
• Certain polling firms have persistent and predictable partisan biases.
• Polling is like golf: there’s more you can do wrong than right.
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The FiveThirtyEight Method
• When is there a real trend in the race? “Textbook” example of distinguishing signal from noise.
• Best way is to look at intra-poll movement, e.g. “the Gallup poll moved 2 points toward Romney.”
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The FiveThirtyEight Method
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-400 -300 -200 -100 0polluntil
bandwidth = .9
Lowess smoother
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The FiveThirtyEight Method
510
1520
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-400 -300 -200 -100 0polluntil
bandwidth = .05
Lowess smoother
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The FiveThirtyEight Method
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The FiveThirtyEight Method
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The FiveThirtyEight Method
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The FiveThirtyEight Method
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