Media Release |
May 12, 2005
Greens Make Small Gains; Liberal Majority Predicted on UBC
Election Stock Market
With one more weekend of campaigning in the British Columbia
provincial election, prices on the UBC Election Stock Market
(UBC ESM) continue to indicate a second majority government
for the BC Liberal party, with the Green Party making some
gains on the popular vote market following the leader’s
debate May 3.
Operated during federal and B.C. provincial elections since
1993, the UBC ESM is an online, real-time market where the
“shares” (or contracts) being traded are based
on the predicted outcome of an election. Past UBC ESMs have
accurately predicted outcomes, within a few seats held, of
the 2001 B.C. provincial election and 1997 and 2000 federal
elections.
“The Liberals suffered some small losses in both predicted
vote share and predicted number of seats over the last couple
of weeks but have settled again at levels that strongly suggest
another Liberal majority government with perhaps 60 per cent
of the seats,” says Prof. Tom Ross, director of the
Phelps Centre for the Study of Government and Business in
the Sauder School of Business and co-director of the UBC ESM.
“In terms of the expected share of the province-wide
popular vote, the Green Party has made the greatest gains
over the course of the market from a share of about 10 per
cent at the start to over 16 per cent predicted currently,”
says Ross. “In some sense the most dynamic market has
been the market predicting the success or failure of the referendum.
Though currently putting the probability of failure at over
60 per cent, the market in early April had the odds at close
to that of a coin flip.”
Participants in the stock market invest their own funds to
buy and sell financial contracts representing the political
parties, and in addition, bear the risk of losing money as
well as earning profits. Four markets are currently operating
for the B.C. provincial election: a “seats market,”
a “popular vote market,” a “majority government
market,” and an “electoral reform referendum market.”
The UBC ESM operates on a not-for-profit basis, with the
results of the market contributing to UBC research and teaching
on market and trader behaviour. The minimum deposit required
to open an account is $25, and the maximum amount that may
be invested is $1,000 per account. At the close of the market,
participants’ portfolios are repurchased by the UBC
ESM at prices determined by the election results. Individual
traders will earn profits or bear losses depending upon whether
the final values of their portfolios exceed or are lower than
their initial investments.
The UBC ESM will close for trading at 11:00 p.m.,
Monday, May 16.
Prospective traders can still open accounts and trade up
until the market closers. To open an account, or to watch
the results, visit http://esm.ubc.ca.
The UBC-ESM is standing by to open a market for the 39th
Canadian federal election following a possible non-confidence
vote in the House of Commons scheduled for May 19.
About the Sauder School of Business at UBC
The Sauder School of Business at the University of British
Columbia is Canada’s leading academic business school.
Recognized globally for its contributions to management practice
through its innovative research and teaching, the school is
dedicated to opening worlds of opportunities for its students,
alumni and associated communities.
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