Recovering election winner probabilities from stock prices

Michael Hanke, Sebastian Stöckl and Alex Weissensteiner

Finance Research Letters, 2022, vol. 45, issue C

Abstract: After the 2020 U.S. presidential election, counting votes and calling states took more time than usual, particularly in battleground states. In the days following the election, winning probabilities changed frequently as new results were tabulated. Based on the sensitivity of stocks to changes in winning probabilities observed before the election, we show how the stock market’s assessment of the unobserved post-election winning probabilities can be backed out from stock prices. Our approach is based solely on publicly available data.

Keywords: Election winner probabilities; Political prediction markets; Election portfolios (search for similar items in EconPapers)
JEL-codes: D72 G11 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612321002038
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002038

DOI: 10.1016/j.frl.2021.102122

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().