Tuesday, November 6, 2012

What are the odds that Obama will be re-elected?

As The Express Tribune puts it,

"Capping a long and bitter campaign, Americans began casting their votes at polling stations across the country on Tuesday, with many polls showing a statistical dead heat between President Barack Obama and his challenger Mitt Romney".

Yet, when forced to put money on the table, and forced to take sides, what are the odds of Obama or Romney winning?

To answer this question, I turned to bookmaker odds. According to Oddschecker, the money is on Obama. Betting $100 on an Obama win gets you a paltry $1 to $2 if Obama gets re-elected. On the other hand, a $100 bet on Romney gets you $1,200 to $4,000 if you guess right.

If we convert these sums into probabilities, we see that Obama has a 93-98% of winning the election, while Romney has only a 2-7% chance of winning. This is summarised in the chart below. Obama certainly has hope that he can believe in.

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