Thursday, 17 June 2010

Christchurch Mayoral race

The Press noted iPredict's prices on the Christchurch Mayoral race this morning.
Jim Anderton will easily win the Christchurch mayoralty, says an online trading stockmarket that has a history of picking the winners of political contests.

Trading on the Wellington-based iPredict website yesterday gave the Wigram MP an 84 per cent chance of winning the October election, with Mayor Bob Parker given just a 15 per cent chance of winning a second term.

The first poll of the election season this week also gave Anderton a strong lead.

Formed about two years ago, iPredict has correctly predicted other events of political and sporting significance.

Anderton said the poll "reflects the mood of the city", but he did not approve of any online "gambling website".

Parker said there were bound to be lots of polls and websites on the mayoralty race.

He was standing because he and the council had set out a positive blueprint for the city and he wanted to continue "being a part of that".

Canterbury University senior economics lecturer Eric Frampton, who sits on the iPredict advisory board, said the Christchurch mayoralty contest had attracted plenty of trading.

He believed more money would be placed on the race over the next 3 1/2 months.

Parker's online fortunes had plummeted in recent months, said Frampton, who has placed money on him winning a second term.

Early this year, Parker was given a 54 per cent winning chance on the site.

"Parker started to drop after Anderton confirmed he was running and he fell further after this week's poll came out," Frampton said.

"I thought the [ministerial] credit-card expense controversy would have hit him [Anderton], but it didn't."
A couple of friendly corrections. iPredict has never run contracts on anything of "sporting" significance: we're prohibited from doing so by the regulation authorizing our running as an exempt futures exchange. And, of course, the Frampton thing. Of the two usual typos, I prefer Clapton to Frampton.

Now, trading. Bob Parker's currently sitting around 16 cents; Anderton at 83.5 cents. Parker's price is shockingly low for an incumbent mayor who hasn't had any particularly huge scandals. But there have been lots of dribs and drabs: what was seen as a bailout of David Henderson's real estate venture, secrecy around the price paid to attract the Ellerslie Flower Show, and his push for the building of a music conservatory for the University downtown in a parking lot at the Arts Centre. This last one attracted a fair bit of opposition, but it seemed a really vocal small minority. Dick Fife at the Dux DeLux was really mad about it, and the usual historical preservation groups were mad, but the outrage seemed pretty much contained to the small group.

But then that poll came out. An internet panel poll rather than a proper phone survey, but it showed pretty strong disapproval ratings for Parker. I'd think it would be Parker's disapproval ratings that spiked the price down more than Anderton's absolute polling numbers as the poll was conducted prior to revelations about Anderton's use of Ministerial credit cards: it was voter absolute dissatisfaction with Parker that I'd reckon drove the price down.

I think that the Parker price overshot fundamentals. I've picked up a few more Parker and would pick up even more if I weren't worried about gathering up rather too large an overall position. I also think the sum of bids across the two contracts ought be a bit less than a dollar as other contenders can still enter the field: the two contracts don't span the possible space.

Is there really less than a 20% chance that the incumbent, who hasn't been completely terrible, wins against Jim Anderton? Really?


  1. Brave taking a bet on Parker because of all the above reasons (plus the Buskers Festival). Parker is very unpopular on the street and is slowly sending CCC to have debts of close on a billion. It is only The Press which doesnt seem to recognize this but I guess they have their advertising budget to worry about.
    The fact that he could be out polled by someone as bad as Anderton immediately after announcing his candidacy, and he is remaining in parliament too.

  2. I wouldn't be buying Parker at $0.50. But 20 cents doesn't seem crazy.

  3. There is huge dissatisfaction with Parker.

    Starting with his black thursday purchase of the Ngai Tahu building.
    The reason for this purchase, immediately after election and before new Councilors arrived at the table in 2007 was that it was an urgent opportunity.
    Well, in fact nobody wanted this concrete monster and the cost is now famously one of the the most expensive buildings per square meter in New Zealand.
    Parker is politically corporate and dishonest
    I would be interested to hear again from

    David who said...

    " Brave taking a bet on Parker becaus of all the above reasons (plus the Buskers Festival). Parker is very unpopular on the street and is slowly sending CCC to have debts of close on a billion ".

    I can see about half a billion between the new Ngai Tahu palace which he will give to Jim, the bus shelter and various.
    But even at half a billion, thats $4000 per rate payer.


  4. @Peter: the markets are saying you're right; I won't disagree with any of the criticisms about bailouts and loony purchases (Ellerslie and the like). I'd just not reckoned all that so far out of the norm for general mayoral behaviour.

  5. I remember Parker being at 80-90% on iPredict a little while before Anderton entered. I don't see how that price and the current price could both be efficient though, since it would imply that the probability of Anderton entering ex ante was single digits, which seems too low. Still, so long as prices were remotely efficient, it would indicate a belief that Parker is not weak so much as Anderton is a particularly strong challenger.

    A parallel I can think of is Senator Byron Dorgan (D-ND) who retired despite high approval ratings likely because of the imminent entry of popular Governor John Hoeven. Hoeven has 40+ point leads against his now second-tier opposition and is considered 100% to win by (granted, not against the incumbent, but it reflects the strength of the candidate).

  6. @Henry: I don't recall his ever being quite that high, but I wasn't watching it that closely.

    I think we've had a bit of information with the poll release on the dissatisfaction numbers though.

    Dorgan's retiring? (little happy dance)

  7. Hmm, I'm excited about Jim as major, I'd prefer him over Bob any day.

    Jim is the classic battler, and if he can rain in some of the silliness that is the CCC spending, then I'm all for it.

    Bob is that show pony form T.V. that loves to stand by the big expensive things and say, look I did that, when it just makes me cringe, how many edifices the the councils wonder do we need.

  8. @Simeon: If Anderton is the fiscal conservative candidate of the available options, I weep.

  9. If the 2 best options we have in this city for mayoral candidates are Anderton and Parker then I am very glad I moved to the Selwyn district.

  10. The media, despite advice to the contrary has been playing the "Blair Anderson" is not standing by omission of fact.

    Complicity of media and those with a vested stake hold in who gets mindshare is assured by perpetuation of the Jim/Bob show - one could be forgiven for believing Socialism versus Elitism is the only debate in town.

    In keeping with the tenor of √≥ffsettingbehaviour there was only one candidate at today’s (08/08/10) debate at St Mary's (N. Brighton) prepared to call in resolved drug policy (ie: Class D) as key to improved public safety, STV to improved governance and contraction and convergence for better frameworks to manage climate mitigation and protection.

    That said, Anderton did agree that water fluoridation had not improved Australian Rugby, whereas Blair Anderson said evidence showed it had not improved dental caries in Hong Kong, rather it had markedly degraded.