Is Hillary Clinton a certainty for 2016?

Here are Ladbrokes’ odds for who will win the 2016 US Presidential election:

80% of all the money staked so far has been on Clinton – is she a certainty?

It’s quite a tricky problem to assess just how short her odds should be. There isn’t any recent precedent for a non-incumbent to be so far ahead of the field. Let’s take a really optimistic view of her chances:

• Chance of actually running: 90%
• Chance of winning the Democratic nomination if she runs: 80%
• Chance of winning Presidential election if she gets there: 70%
• Probability of becoming President; 0.9 x 0.9 x 0.7 = .567. That equates to odds of about 8/11.

But take a marginally more realistic view:

• Chance of actually running: 85%
• Chance of winning the Democratic nomination if she runs: 75%
• Chance of winning Presidential election if she gets there: 65%
• Probability of becoming President; 0.85 x 0.75 x 0.65 = .414. That equates to odds of just under 6/4.

She actually hit as low as 1/2 to win the 2008 election at one point during 2007.  There are all sorts of things that could happen to derail her bandwagon again this time. For one, she’s in her late 60s and has had a couple of health scares. That sort of actuarial risk is easy to overlook. Then there are all sorts of other very unlikely, but non-zero probability events that might occur. What if Obama leaves office early for any reason? Then she might have to beat an incumbent President in a primary.

All in all, I think 6/4 is about right. But personally, I wouldn’t be backing something that was “about right” when I would have to wait over two years to get paid out. I’ve had one bet so far on 2016 – Mike Huckabee at 33/1 to be the Republican nominee.