Aggregate earnings and market expectations in United States presidential election prediction markets |
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| Affiliation: | 1. University of Nebraska at Kearney, Kearney, Nebraska, USA;2. Louisiana State University, Baton Rouge, Louisiana, USA;2. Kennesaw State University, United States of America;3. The University of Alabama, United States of America;1. Department of Accounting, Zayed University, Dubai, United Arab Emirates;2. Department of Accounting, American University of Sharjah, United Arab Emirates;3. Department of Finance, American University of Sharjah, United Arab Emirates;4. College of Business Administration, Zayed University, Dubai, United Arab Emirates;1. University of New Hampshire, USA;2. Washington State University, USA |
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| Abstract: | This study uses election futures market data to provide the first empirical evidence that aggregate earnings conveys timely “election-relevant” information effecting betting market participants' expectations about the likely outcomes of United States presidential election campaigns. I document that aggregate earnings news is associated with multiple facets of U.S. economic health affecting voter utility. I then use high-frequency data from the Iowa Electronic Political Prediction Market (IEM) to document that aggregate earnings news, including cash flow news, is significantly related to changes in the expected outcomes of U.S. presidential elections and incremental of other measures of economic health. |
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