The 2020 (Re)Election According to the Iowa Electronic Markets: Politics, Pandemic, Recession, and/or Protests?

The 2020 (Re)Election According to the Iowa Electronic Markets: Politics, Pandemic, Recession, and/or Protests?

by Thomas S. Gruca and Thomas A. Rietz 

Multiple historic events characterize the 2020 Presidential election: the Mueller report, an impeachment vote, a pandemic, a recession, racial protests, etc. Did these events impact the expected election outcome? We study this question using Iowa Electronic Market (IEM) price changes around these events. We also examine the uncertainty around IEM vote-share forecasts for incumbent Donald Trump while comparing his chances to prior incumbents’. 

Neither individual political events nor individual events leading to racial protests have significantly affected the 2020 election according to the IEM. While Trump’s chances fell during the stock market collapse and recession associated with the initial wave of COVID-19, they did not rise with the stock market recovery and decreasing new jobless claims.  Instead, his chances continued to fall as COVID-19 cases rebounded and protests continued.  

On 08/26/20, the IEM forecasted Republican vote-share ranged from 49.95% to 48.36% (depending how market prices are translated to forecasts).  Considerable uncertainty remained in that all estimates of confidence intervals overlapped 50% vote-share. The IEM estimated chances of Trump winning the popular vote ranged from 33.99% to 33.10%.


The editorial team at PS: Political Science & Politics is pleased to release of the 2020 Presidential Election Forecasting symposium. This year, due to the amazing work done by Ruth Dassonneville and Charles Tien, we have 12 forecasts and three critical reviews. We hope teachers, journalists, and the general public will read, reflect, and comment.  For the latest updates, follow PS on Twitter.

Be the first to comment

Leave a Reply

Your email address will not be published.


*