1. E LECTION L ESSONS FROM THE C OUNCIL FOR E CONOMIC E DUCATION

2. Council for Economic Education 122 East 42 nd Street, Suite 2600 New York, NY 10168 Phone: 212-730-7007 or 1-800-338-1192 Fax: 212-730-1793 www.councilforeconed.org CEE MISSION The Council for Economic Education (CEE) is the leading organization in the United States that focuses on the economic and financial education of students from kindergarten through high school. For the past 60 years, our mission has been to instill in young people the fourth “R”—a real-world understanding of economics and personal finance. It is only by acquiring economic and financial literacy that children can learn that there are better options for a life well lived, will be able to see opportunity on their horizon line and, ultimately, can grow into successful and productive adults capable of making informed and responsible decisions.

3. L ESSON 6: C AN E LECTION F UTURES M ARKETS BE M ORE A CCURATE T HAN P OLLS ? V ISUALS

4. Firm When Conducted ObamaMcCain Undecided Obama Lead Election Result* 11/452.945.7-----7.3 Harris (Online) 10/30-11/3524408 Fox News11/1-2504357 Gallup10/31-11/25544011 Zogby10/31-11/35443311 GWU11/2-3504802 NBC/WSJ11/1-2514328 ABC/WP10/31-11/3534429 CBS/NYT10/31-11/2514259 CNN/USA10/30-11/1534617 IOWA EM11/353.546.4------7.1 LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS? VISUAL 6.1 COMPARING POLLS AND MARKETS E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY * Election results values are rounded.

5. The Iowa Electronic Markets predicted the final margin in the 2008 presidential election to within two tenths (.2) of a percentage point. Prices on the IEM’s Vote Share Market predicted that Barack Obama would receive 53.5% of the two-party presidential vote, and John McCain would receive 46.4%. After the ballots were counted, Obama received 45.7% of the vote, and McCain received 52.9%. If third party candidates are ignored (as in the IEM), then Obama received 53.7% of the two party vote, McCain received 46.3%, very close to the IEM result. The IEM did a better job of predicting than did any of the polls, based on margin of victory (although two polls came close a margin of victory of 7%). VISUAL 6.2 RESULTS OF THE 2008 PRESIDENTIAL ELECTION E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?

6. Through all the twists and turn of the primary campaign and the final campaign, the Iowa Electronic Markets consistently picked Barack Obama as the leader. As illustrated in the figure below, from June 2006 until November 2008, Barack Obama led by similar margins to the final election outcome. VISUAL 6.3 RESULTS FOR THE PRESIDENTIAL ELECTION E LECTION L ESSONS © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY LESSON 6 – CAN ELECTION FUTURES MARKETS BE MORE ACCURATE THAN POLLS?