But polls got it wrong in 2016

Investors will not forget that the polls got it wrong in 2016. In particular, state polls underestimated support for Trump in the Upper Midwest including key swing states like Pennsylvania, Michigan and Wisconsin. In hindsight, pollsters have put this down to three reasons:

The “shy Trump Vote”; those who supported Trump for president but did not admit this to pollsters
Those who made a last minute decision, choosing to vote for Trump extremely close to the election
Oversampling college-educated voters as they were more likely to answer the surveys

Despite an election post-mortem, it is unclear whether pollsters have significantly changed their approach. Some university pollsters who had not done so before, are now weighting their results by education. But some pollsters are not.

Pollsters point out that last minute voting decisions is not a polling problem and is not something that can be “fixed”, but only watched to gauge the level of uncertainty. Finally, the “shy Trump vote” does not reflect a weakness in the polling itself.

We think the “shy Trump vote” will be a less of a factor this time around given Trump has a track record serving one term as President, giving people more confidence to be open in their support. We can make adjustments to the polls for the other two factors.

To capture the last minute decision-makers, we assume that anyone who does not pick a candidate in the polls has Republican voting preferences – specifically of white non-college voters. Though this lowers the Biden spread amongst battleground states, it is not enough to flip any states to Trump, leaving Biden with 62% of the vote.

To counter oversampling problem, we oversample white non-college educated workers to counteract this. This flips North Carolina and Nevada, but still points to Biden getting 58% of the vote.

When doing both adjustments, this flips many more states and points to a Trump victory, leaving Biden with only 41% of the vote. So, assuming the pollsters have made no changes since 2016, the election is likely closer than what the headline polls suggest. But still, fairly aggressive assumptions are needed to point to a Trump win.

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