Some More Intrade Analysis: The US Senate and the Economy
This is my follow up on yesterday’s analysis showing the connection between President Obama’s chances of re-election and the chances of a recession in 2012 as predicted by Intrade. In this post, I do the same analysis with regard to the probability of the Republican’s taking control of the Senate in the next election. Here is the chart:
The blue series represents that odds of the Republican’s taking control of the Senate, the Red series represents the odds of a recession in 2012. The time period of analysis is the same as the time period for my previous analysis with regard to President Obama. As this graph shows, there has been a positive trend in both data series since March 2011. The correlation coefficient is 0.449. This represents a fairly strong positive correlation between the two events, although quite a bit lower in absolute value terms than the level of negative correlation for President Obama. So the Intrade data indicate that the forecasts of bad economic news have benefited the Republican party vis-a-vis both the Presidency and the Senate. I’ll perform this analysis for the House or Representatives in the near future.