What are the odds? Using online betting markets to predict the 2010 UK election result

This article investigates methodologies for translating data from constituency betting markets in each of the UK's 650 constituencies into national-level predictions of parties' seat shares for the 2010 House of Commons election. We argue that information from betting markets is highly disaggregated (offering candidate-level predictions), adjustable throughout the campaign, and free to access – meaning that such data should be a useful resource for electoral forecasters. However, we find that constituency-market gambling data from the site Betfair.com proved to be a relatively poor basis for predicting party seat shares, and we also find evidence suggesting that the data were systematically biased in several ways. Nonetheless, we argue that future research in this area should compensate for these biases to harness the potential of constituency prediction markets for electoral forecasting.