선거와 시장경제-제15대 대통령 선거를 중심으로-

The Korean Presidential Stock Market : A Market Approach to Predict the 15th Presidential Election in Korea

The 1998 Korean Presidential Stock Market(KPSM) is an experimental securities market that aims to track the dynamics of campaign and predict the 15th presidential election outcome in Korea. Based on Forsythe et al.(1992), the market was designed, and first implemented in Korea by Korea Economic Research Institute and Joongang Daily Newspaper. The market operated as an internet-based double-auction market, running 24-hours a day from the time it opened on September 22, 1998 until it closed, the mid-night before the election day, December 18, 1998. A total of 1,488 traders(among 3,866 nationwide applicants) registered in the KPSM voluntarily, and 574 traders among them took part in tracling stocks actually. The traders were predominantly male, young, and well-educated. The distribution of the traders' political and demographic characteristics did not represent those of real voters. However, the predictions of the KPSM are quite accurate to the outcome of the election. The forecasting errors were only 0.6~1.1% points to candidates' actual vote shares.