Federal election: another triumph for the market

12/10/2004

Last Saturday the coalition Liberal/National Party easily won the election, approved despite polls predicting a very close result. However, phimosis the market (i.e., capsule betting odds) was giving a probability of 0.6 for a Liberal victory.

This reflects an interesting phenomenon: one should trust more where people put their money than what they say will do. I call this the ‘footy tipping effect’, where most fans will bet against their team if that means they can win the tipping competition. Thus, one can extract more reliable information from tipping than when there is nothing to loose (like in an opinion poll).

Coming back to election policies, Labor was unable to sell its forest policy in Tasmania and did not get anything in exchange in mainland. Labor lost two seats — Bass and Braddon — in Tassie (at least in part because of that policy) and failed to gain the marginal seats in urban mainland that were the reason of being for that policy.

I expect that now that the election is over, political pressure on the forest industry will reduce a bit. Despite of this, I think it is a good idea for industry to use this post election time for making changes that enhance community support in urban areas. This would reduce the ability of its adversaries to put again forestry in the spotlight at federal level. Finally, it is clear from the election results that rural areas are certainly behind industry, as it has been suspected for a long time.

Filed in economics, environment, politics

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