su_marke.gif (2405 bytes)

David Strömberg

WH 2008: Technical issues

Institute for
International Economic Studies
Stockholm University
SE-106 91 Stockholm

Phone: +46 8 16 43 77
Fax: +46 8 16 14 43

Last updated,

 October 1, 2008

How the probabilities are estimated

The details are expained in my AER paper. I forecast each state election outcome 1948-2004,  using the same information each year (opinion polls, past votes, etc.). I then measure the prediction error in each state: the difference between the forecasted election outcomes and the actual. Starting from the predicted outcomes for each state in 2008, I add errors randomly drawn from the distribution of past prediction errors. This gives me a a distribution of hypothetical election outcomes. From this, I can compute different statistics, such as the probability that either candidate wins.

It is crucial to allow for national swings, otherwise the uncertainty in the election is underestimated. I allow the states to swing together by estimating the national average prediction error in each election, and the indpendent state errors. 

The varibles included. At the national level, the model uses national opinion polls, lagged national vote share, incumbent president and incumbent party, second quarter economic growth. For recent years, at the state level, I use state-level opinion polls, lagged votes and the ADA-scores of the state's congressmen and senators.

One could draw errors from the actual error distribution. I instead assume that the distribution of forecast errors is normally distributed and draw from a distribution with the same variance (and mean) as that of the prediction errors. For state outcomes, the actual error distribution is quite close to normal. For the national errors, we only have 15 observations so it is hard to judge whether the errors are normal.