Corbyn went from being a long-shot bet to odds-on favourite (Source: Getty)
Forget the old chestnut: “If you really want to know what is going to happen just look to the betting odds. Money is smarter than pollsters.”
So when the next person trots out the tired old arguments about “the wisdom of crowds”, point them to Jeremy Corbyn’s victory in the Labour leadership contest.
This is because nothing beats good data.
It provides some of the clearest proof possible that betting odds follow the mainstream narrative rather than being a crystal ball foreseeing future events.
On 21 July, YouGov reported that Corbyn had stormed into the lead in the leadership contest with 43 per cent of first preference votes.
On 10 August – just before voting began, because we don’t publish election data after ballotting has started – we said that Corbyn was set for a knock-out blow, claiming 57 per cent.
And so it was on Saturday, when he was declared the winner with 59.5 per cent.
A look at the Ladbrokes’ odds over the course of the contest shows clearly why Corbyn went from being a long-shot bet to odds-on favourite.
Before we published our first research into the shape of the contest, Corbyn was still third favourite.
Within hours of that data being published, the odds had been slashed and he became second favourite.
The effect of our second piece of research into the contest was even more dramatic, prompting the odds of a Corbyn victory to move from around 40 per cent to about 70 per cent within a few hours.
It was YouGov’s research that shifted these odds – that is the power of quality data.
On one occasion – the 7 May election – we were wrong.
But the bookies were even more wrong. And think back to December 2011. Everybody now says that it was inevitable that Tesco
would take a tumble.
However, readers of this column will recall that when I predicted the decline of sales, the share price had been rock-solid for a year and it was a full month before a third of the value was knocked off its stock price.
The fact is that people don’t know much without good data.