What to expect if Romney (or Santorum) wins Michigan
Update, 9:49 p.m. ET: Mitt Romney is now very likely to carry the state of Michigan. With 50% of the state reporting he is up by almost 20,000 votes to Rick Santorum and we project him as 96.9 percent likely to hold that lead to victory.
The markets reacted quickly tonight allowing The Signal to be among the first news sites to signal Romney's likely victory (follow us on Twitter for the fastest reaction pieces during breaking news events):
The Signal has favored Romney as the likely winner throughout the time between his big losses on February 7 and when the polls closed tonight the likely victory marks an important milestone on his road to his likely Republican nomination. As projected, he has increased his likelihood of gaining the Republican nomination by nearly 6 percentage points since the polls closed from 72.8 percent to 78.5 percent.
Ahead of tonight's primary results, we see two possible paths the prediction markets could take depending on what happens in Michigan.
In Arizona, the markets give Romney a 99.4 percent likelihood of carrying the state's primary contest. (The picture on the ground in Arizona confirms this expectation.) This is so in bag that even the candidates spent most of the Arizona debate last Wednesday looking north, so we will too.
In Michigan, Romney is has 62.9 percent likely to win the primary in the state where he was born, with Santorum taking the remaining likelihood. This is a very close contest, as it has been since right after the Feb. 7 primaries in Minnesota and Colorado; over the last few weeks Romney's position has bounced around from a high of 79 to a low of just below 50.
Currently, Romney has a 72.8 percent chance of winning the nomination, while Santorum trails heavily at an 11.4 percent chance. In scenario A, in which Romney wins in Michigan, we predict his odds of winning the nomination to climb by 5-10 points. He would have showed strength against his most formidable challenger and demonstrated the power of an overwhelming organizational advantage.
If Santorum wins, we expect his likelihood of gaining the nomination to move up, but only slightly. He would still have a long road ahead of him to win the nomination, and those who place bets on these likelihoods don't jump ship after a two-state primary night. His organization will be extremely tested a week today, when 10 states vote at once.
We will update this post periodically throughout the evening. Follow along on PredictWise for the real-time likelihood of the Republican primaries, the Republican nomination, and the presidential election.
David Rothschild is an economist at Yahoo! Research. He has a Ph.D. in applied economics from the Wharton School of Business at the University of Pennsylvania. His dissertation is in creating aggregated forecasts from individual-level information. Follow him on Twitter @DavMicRot and email him at thesignal@yahoo-inc.com.
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