Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/48116
Authors: 
Berlemann, Michael
Schmidt, Carsten
Year of Publication: 
2001
Series/Report no.: 
Dresden discussion paper in economics 05/01
Abstract: 
In a meta study of 25 political stock markets conducted in Germany in the last decade we analyze their predictive success. Although the predictions of political stock markets are highly correlated with the corresponding polls, the markets are able to aggregate additional information. One explanatory variable for variations in predictive success of the German stock markets relative to the polls is market efficiency. Even though the overall predictions of the political stock markets are quite reliable on the aggregate level we find systematic prediction errors on the contract level that can be attributed to the vote share size and to individual trader biases.
Subjects: 
political stock markets
forecasting
market efficiency
proportional representation
JEL: 
C93
D82
G1
Document Type: 
Working Paper

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