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Inside Story: Prediction problems

business analytics news and articles

By Pete Horner

“It’s tough to make predictions, especially about the future.”

A number of sources have been credited with making some version of that statement, from Danish physicist Niels Bohr to legendary baseball player/philosopher Yogi Berra. Berra and Bohr are both right: Making predictions about the future is tough. But that’s never stopped folks from making predictions, and since we’re knee-deep in the U.S. presidential campaign, modern-day Nostradamuses and political pundits are coming out of the woodwork to make predictions regarding the outcome of the race to the White House between presumptive Republican and Democratic presidential nominees Donald Trump and Hillary Clinton.

How do you predict a presidential election when one of the presumptive nominees is perhaps the most unorthodox, unpredictable candidate in recent history, when both of the leading candidates have record-high negative polling numbers, and, as of this writing, when both of the presumptive nominees face intra-party strife that could damage or even scuttle their respective campaigns by the time their party conventions are concluded? And what about the impact that independents and third- and fourth-party candidates might have on the outcome?

College professor and quantitative historian Allan Lichtman has correctly predicted the national popular vote outcome of every U.S. presidential election since 1984, and his method barely takes into consideration the candidates, their personalities, their positions on the issues or their poll numbers. Rather, Lichtman’s prediction is based on the answers to 13 key questions – the keys to the White House. Doug Samuelson, a longtime member of INFORMS, interviewed Lichtman for his take on this year’s presidential election, the turning of the “keys” and the science behind the “keys.” For more on the story, see page 28.

Meanwhile, Sheldon Jacobson, another college professor and longtime member of INFORMS, also has his analytical eyes on the race for the presidential prize. Sheldon and his students maintain an Election Analytics website that tracks and analyzes polling data to forecast who will win the presidency and which party will secure control of the United States Senate. The analytics are based on Bayesian statistics and operations research methodologies.

business analytics news and articles







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