I’ll start by taking the outside view. Since the rise of the two main political parties in the US (let’s set the time as 1868), there have been 38 presidential elections. The Republicans have won 21 of these, while the Democrats have won 17. That’s roughly a 55/45 split. Despite the fact that a 3rd party candidate has not won during this period, some swans are black, so I’m affording a small chance to this possibility during this election cycle. That’s where I’m starting, but there will be a lot of updates to come.
The outside view seems entirely appropriate here since we don’t yet even know who the two parties’ candidates will be (or if there will be a significant 3rd party candidate for the first time since 1988). However, I want to start moving inside just a little bit. The betting market has had the Democrats as a 3-to-2 favorite for about 2 months. I’m incorporating that fact into my revised forecast, while leaving the door open just a crack to the possibility of a black swan victory by a 3rd party candidate. I don’t anticipate modifying this forecast often until it’s quite clear who the parties’ candidate will be.
- 48.5% A Democrat
- 51% A Republican
- 0.5% Other