Work detail

Forecasting Election Results in the Czech Republic

Author: Mgr. Kateřina Doskočilová
Year: 2019 - summer
Leaders: doc. PhDr. Tomáš Havránek Ph.D.
Consultants:
Work type: Economic Theory
Masters
Language: English
Pages: 69
Awards and prizes:
Link:
Abstract: In this thesis, a forecasting model for the 2017 legislative election in the
Czech Republic is built. As the Czech Republic has a multi-party system, the
outcomes of the model are the expected vote shares for each party. There
are two types of forecasts calculated. Firstly, a poll-based forecast using a
dynamic linear model and Kalman filter to weigh the information in the polls.
Secondly, the prices on betting markets are translated into probabilistic forecasts
for the expected vote shares. This is a novel approach as prediction markets
were previously used to forecasts only the probabilities of winning an election.
Finally, the two types of forecasts are combined into one and weighed by their
variance. Comparing the forecasts, we conclude that the betting market is able
to predict the exact vote shares the most accurately right before the election.

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