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Free Ph.D. economics thesis idea, for anyone who wants it...

By July 5, 2007

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Institutional Economics on Federal Election Betting Markets:
Federal Election Betting Markets

Canberra bookie Portlandbet has opened a book on the outcome of every federal seat ahead of this year’s general election:

Punters have the opportunity to bet on any and every seat for the first time with prices on all 150 seats being offered.

On current prices, Portlandbet forecasts the Coalition to return to government with a reduced majority, winning 77 seats to 71 for the Australia Labor Party. Independents should win 2 seats.

This is consistent with the flow of money for the Coalition in recent weeks, who have firmed in Portlandbet markets from $2.15 to $1.87.
I've often thought that doing something similar to this in Canada, but have an election market for each riding instead of odds set by a bookie, would make for a great Ph.D. research project, and the regulatory hurdles don't seem too high as UBC has done something like it with the UBC Election Stock Markets.

It would make for a great experimental labratory, because you could run all kinds of experiments on what happens to asset prices, the magnitude of price fluctuations, liquidity, etc. by making changes at points in time to the institutional structure. What happens when we allow for derivatives to be traded? What happens if we institute a Tobin Tax on transactions. Etc. etc.

If anyone is doing a project like this, I'd love to hear about it.

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