Forecasting migration movements using prediction markets.

Abstract

Migration forecasts are crucial for proactive immigration and integration management. While the demand for accurate migration forecasts continues to grow, the current state of migration forecasting is still unsatisfactory, because they tend to lack precision. We introduce an alternative method to forecast migration movements: prediction markets. While prediction markets are mainly unknown in migration studies, they are established in the political economy of forecasting election outcomes. For its application to a complex phenomenon in a more constrained information environment such as migration movements, we argue that prediction markets allow to balance complementarities of current qualitative and quantitative approaches if they provide solutions to avoid thin trading and integrate expert knowledge into the market. We apply the prediction market to forecast immigration in four West European countries in 2020 and find encouraging results. We discuss the strengths and limitations of prediction markets to migration forecasting, including ethical considerations, and guide its future application.

Supplementary information: The online version contains supplementary material available at 10.1186/s40878-024-00404-0.