Daily Update: House Republicans Another Step Forward; Senate Republicans Take a Step Back

Post is a little late:  Have to admit I had to take the time to watch the first miner emerge in Chile.  Certainly an uplifting moment.

Republican prospects in the House of Representatives took a step forward in today's data run as the probability of a House Republican takeover pierced the 80% level.  The midpoint range of our seat estimate is 231 which would represent a 54 seat increase from the 177 Republicans held after the 2008 elections.

On the Senate side of the ledger Democrats produced a small, but significant comeback in today's analysis.  (It is worth noting that the data was extremely volatile today and our data run represents a snapshot of data at about 9 P.M. EDT today.)

The midpoint, or median, estimate of our macro model forecasts 49.5 Republican seats; the micro model forecasts 48.1%.  The macro model currently projects the probability of a Republican takeover of the Senate as 26.8%.

As I mentioned there were several changes in individual races from yesterday.  As the table to the left illustrates, if our lower end estimate in all races proved to be the outcome, Republicans would fall four seats short, while at the upper end estimate they would fall one seat short. 

Remember the markets are extremely volatile at this point in time and it is not unusual to see large one day swings in the data.  The question is whether this is a new trend or simply a one or two day correction.  To know that, we'll have to wait for a few more days worth of data.

Today's data does provide the opportunity to give an illustration of conditional probabilities and how they could be affected as events unfold on election day.

Let's take the hypothetical situation where four races (West Virginia, Washington, Illinois, and Nevada) are the races that will determine Senate control.  From a straight statistical standpoint the probability of Republicans winning all four is 6% -- using our median probability estimate in the races AND assuming they are independent events.

As you watch on election night, as each race is decided this probability will change.  The table at the left shows how the probability of Republican control would change based on results becoming known in the individual races.  As I said, this is hypothetical and is unrealistic from a time perspective, but is intended to provide an example.  If Republicans win West Virginia, then the probability of control would increase to 12%.  If the next state to be decided in the Republicans favor were to be Washington, Republicans chance of control would increase to 26%.  With two races remaining, the news arrives that Republicans have won Illinois and only Nevada is outstanding, then Republicans chances of winning the Senate become 51%. 

We hope to be able to blog updated probabilities throughout the evening on election night as races are decided.  This will vary from the example above not only by order (and perhaps states), but by race probabilities as well.  For instance if Republicans were to score an early and sizeable victory in West Virginia, that would likely alter market participant views of other races.  Conversely, a quick Democratic win, would likely see probability declines for Republicans in other races.

Regardless of how successful we are in live blogging election night, we will have much more to say about scenarios and how to track election night probailities as the returns come in.

If you have any questions or suggestions for topics please email us at electionmarkets@gmail.com.  And I encourage you to let others know about this site.  At the end of this week we will be posting our first online poll -- if the President and Vice President choose to watch a movie on election night instead of the returns, what will it be.  The list is about complete, but email us any suggestions for movies to include.

Republicans Strengthen House Position; Will There be Dino-mite in the Senate?

Top Line Numbers

Republicans scored their highest yet probability of taking the House in today's model run -- 78.1%.  The estimated Republican seat count after the election stands at 230 in both our low-end estimate and the median estimate.   The low-end estimate is also the highest yet for Republicans on this measure.

As for the Senate, our macro model is indicating a Republican seat count of 49.5 and a control probability of 28%.   (Remember -- the InTrade control contract on which our model is based would not count a Murkowski victory toward Republican control; presently our model shows the Alaska race favoring Joe Miller with a 64% probability of winning, Senator Murkowski at 29% chance and Democrat McAdams with a 7% chance).

Our micro level model (still operating on a wide screen for analysis purposes) currently projects a Republican seat count of 48.4 seats. The same caveats apply to our micro model as do our micro model, i.e.; a Murkowski win would not count as a Republican seat.  

The following table shows our current probability range estimates for the most competitive races.

The table lists those Senate races where  the Republican and Democratic candidate both have a victory probability of greater than 20% on our midpoint estimate.  None of the six is a seat currently held by Republicans.  At our low end estimate (for Republicans) the Republican candidate has a greater than 50% chance of winning in four of the six; at the upper end estimate the Republican is above 50% in five of the six.  If Republicans were to win those five they would control the upper chamber.  One of the changes in today's rankings is that our model now gives Sharon Angle a higher probability of victory than Matt Kirk in Illinois, although the margin is very narrow.

Sunday Night Special: Angle Poised to be 50th GOP Senator; Rossi Knocking on Door for 51st

A couple of days ago, the situation was reversed -- and we may see several more reversals in the days to come.  Today's analysis of InTrade contract data shows Sharon Angle pulling slightly ahead of Senate Majority Harry Reid and now stands at a 51% probability of victory.  This is a signficant improvement from the 37% probability of victory she had declined to in mid-September.

Less than three weeks ago our model gave Rossi a 31% chance of victory; today our model assigned a probability of victory of 49.9%.  Rossi did briefly surpass the 50% threshold two days ago.  This race remains incredibly tight not only in the polls, but in our estimates as well.  Our model suggests that Matt Kirk would be the 49th GOP Senator and assigns him a 55% chance of victory -- clearly still in the toss up category.

On the House side, Republicans are in a strong position according to our models.  Based on our analysis of InTrade data Republicans now have a nearly 77% chance of winning control of the House of Representatives.

Today our model estimates that Republicans will hold between 228 and 231 seats in the next Congress.  This would represent a pickup of between 51 and 54 seats from the 177 they held following the 2008 election.

As noted yesterday, our analysis of InTrade data suggests that Republicans have a roughly 1/3 chance of gaining 60 or more seats.

If you want to see some more of today's charts, click read more below.