Index Methods for Forecasting: An Application to American Presidential Elections

J. Scott Armstrong, University of Pennsylvania
Alfred G. Cúzan, The University of West Florida

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Postprint version. Published in Foresight: The International Journal of Applied Forecasting Issue 3, February 2006, pages 10-13.

Abstract

Lichtman (2005) reports that the Keys model has been able to pick the winner of every presidential election since 1860, retrospectively through 1980 and prospectively from 1984-2004. Given this record, it seems sensible to examine this index method. We tested how well the Keys model predicted the winner of the popular vote, and also how closely it forecasted the actual percentage of the two-party vote going to the incumbent ticket. The index method performs well compared with regression models. It also offers the opportunity to incorporate many policy variables. Index methods can be applied to various choice problems faced by organizations.