Thirteen months and what do you get? As far as Delhi is concerned, three exciting and unpredictable elections, with the decision of the third scheduled for February 10. The excitement and unpredictability is all because of the presence of the new and different political party — the Aam Aadmi Party (AAP). Every opinion poll in December 2013 had the AAP barely making its presence felt. It ended up second, with 28 out of 70 seats, and even formed the government before unceremoniously kicking itself out. In the Lok Sabha elections, the AAP’s expectations were high, not only for Delhi but also for all of India. We had some expert commentators even believing that the AAP would be part of the national government. It ended up with four Lok Sabha seats nationally (all in Punjab), and none in Delhi.
An assembly segment break-up of the Delhi Lok Sabha election reveals that the BJP won 60 of the 70 assembly segments, and the AAP won 10. Opinion polls in January, to date, show a huge bounce-back for the AAP — a 5 per cent increase in its vote share compared to December 2013 — 35 per cent versus 30 per cent. The BJP also shows a near-identical increase in vote share, from 33 to 39 per cent. In terms of seats, the prediction is for a near-dead heat between the two, with the BJP marginally ahead, 35 to 31. Even a dead cat bounces, so why should we grudge the Congress this chance to spoil the BJP party? Given forecast errors, another hung assembly in February 2015 cannot be ruled out.
Only brave souls and statisticians can even attempt to forecast this election. It has been further jumbled up with AAP defections, and with the announcement of Kiran Bedi as the BJP’s chief ministerial candidate. Does that mean that an uncertain election is now certain for the BJP? As we await opinion polls, exit polls and the final result, here are some statistical calculations — from a brave forecaster!
The election outcome is forecast based on two separate statistical methods. The first is to look at history for parallel events. The first cut of history is to look at all assembly elections post-1991, which followed a national election within 12 months. The second cut of the data is to look at only those parties that obtained at least 20 per cent of the vote in both the Lok Sabha and subsequent assembly elections. The results are revealing. Only nine out of 26 elections show an increase in vote share for any party in the assembly, as compared to the previous Lok Sabha election; and just three show an increase in vote share of more than 1.3 per cent. One of these outliers was in Delhi itself; in 1998, the Congress increased its vote share by 5.1 per cent over the earlier Lok Sabha election in the same year. The other two outliers were in Punjab and Haryana, for the Akali Dal (8.9 per cent increase in 1997) and the Indian National Lok Dal (4.3 percentage point increase in 2005). The average for all the 26 elections is a negative 3 per cent.
Opinion polls are forecasting a 2 per cent gain for the AAP over its Lok Sabha share. The opinion poll loss for the BJP, at 8 per cent, is nearly three times the average loss in 26 comparable elections since 1991. As they say in statistics land, the odds are heavily against both the AAP gaining 2 percentage points and the BJP losing such a large vote share. But this is a special election in that a third party, the Congress, is in danger of falling off the map. So its vote share will likely go to the two parties, the BJP and AAP, with the latter likely to get more. But it takes a stretch of imagination and calculation to say that the net loss for the BJP over the Lok Sabha election would be 8 per cent, and the net gain for the AAP, 2 per cent.
The second method is to predict “reasonable” swings in vote shares for the February 2015 assembly election over the observed December 2013 vote. Five different experiments were conducted, with the AAP’s median gain in vote share of 2 percentage points over the 2013 assembly polls. For the BJP, the median “experiment” vote share is 40 — 7 percentage points less than the Lok Sabha election. For the Congress, the median vote share change over a disastrous Lok Sabha election is a gain of 5 percentage points.
Details of all the five experiments are provided and the results converge on the following. First, it seems highly unlikely that the Congress would get much more than five seats, a fall of three seats from its already low 2013 total. The AAP is unlikely to get much more than 21 seats — four of the five reasonable experiments converge on 21 seats, and only one scenario yields 28 seats for it. The BJP should easily win this election, with a median prediction of 44 seats. A hung assembly or an AAP victory would be a black swan or a man-bites-dog event.
As I said at the beginning, the motivation for this analysis was to have a bit of fun, and to see how likely were the opinion poll predictions of a close contest. No matter how one slices the data, the initial set of opinion polls is likely to be way off the mark. If the AAP succeeds in getting around 31 seats, and the BJP only a few seats more, I will be off the mark. Let the fun, sorry games, sorry election, begin.
The writer is chairman of Oxus Investments, an emerging market advisory firm, and a senior advisor to Zyfin, a leading financial information company.