Opinion polls in advance of a plebiscite are highly scientific yet have proven themselves to be way off the mark compared to the actual result. Despite the advances in sampling procedures avoiding bias, opinion polls seem to be getting worse, rather than better, at predicting outcomes.
Some analysts think that the divergence between pre-poll opinion and actuality can be corrected with better data. I used to fall into that camp, but now I am convinced that science correctly measures opinion prior to any election or referendum. Opinion polls are wrong simply because voters change their minds when standing in front of the voting machine or with a pencil and paper in hand. A lot happens inside the polling station, particularly inside the heads of the minority of voters who are apt to change their votes.
The Brexit vote is only 3 days away and the decision is way open. The bookies favour the odds on Britain remaining in the EU at 5/12 while the odds are against leaving at 3/2. This seems like a wide market…
Voters have two traits: (i) they don’t like change and (ii) they vote with their pocket. Both these traits favoured the ‘No’ vote in last year’s Scottish succession referendum. The traits for Brexit are split this time around – inertia favours the ‘Remain’ vote but the hip pocket decision dictates leaving the EU since Britain spends more than it receives from its membership. So when voters are in the polling booth, how will these competing forces get resolved?
‘Inertia rules’ on entering the polling place, so its no surprise that the ‘Remain’ camp are odds-on favourites today, 3 days in advance. Will the hip-pocket nerve trigger a protest inside the polling booth itself? This is highly likely in my view since, not only is it a cheeky thing to do, it’s economically justifiable as well. Sticking the finger up at the Europeans is so much easier if you can justify this act of defiance intellectually, armed with a cost-benefit analysis!
Exit polls will detect this behaviour very quickly, with a sample of 100 or 200 voters. Exit polls are extraordinarily accurate as voters are quite open telling the truth after registering their vote. A smart trader could fund a private study by paying a few students a couple of hundred quid to stand outside a polling booth. Watch the early FX moves on Thursday morning – if the hip pocket nerve delivers a finger to the EU, Sterling will fall..I mean rise..I mean fall…rise…???