How the American Public Perceived Electoral Competition in the States during the Pre-poll Era: A Prediction Market Data Analysis of the 1896 Presidential Election

Abstract This study uses prediction market data from the nation’s historical election betting markets to measure electoral competition in the American states during the era before the advent of scientific polling. Betting odds data capture ex ante expectations of electoral closeness in the aggregate, and as such improve upon existing measures of competition based on election returns data. Situated in an analysis of the 1896 presidential election and its associated realignment, I argue that the market odds data show that people were able to anticipate the realignment and that expectations on the outcome in the states influenced voter turnout. Findings show that a month ahead of the election betting markets accurately forecast a McKinley victory in most states. This study further demonstrates that the market predictions identify those states where electoral competition would increase or decline that year and the consequences of these expected partisanship shifts on turnout. In places where the anticipation was for a close race voter expectations account for a turnout increase of as much as 6%. Participation dropped by 1%–6% in states perceived as becoming electorally uncompetitive. The results support the conversion and dealignment theories from the realignment literature.