[RivieraKid]

> I'm not sure why that kind of interstate correlation should impact predictions?

538 has low positive correlations between states on average, which actually has a big impact, it increases overall uncertainty (and therefore Trump's win probability). Why? If the states are not correlated, you usually end up with a few states going off the rails, like Trump winning Colorado without any nationwide swing.

[DavidSJ]

Other way around: uncorrelated errors tend to cancel each other, correlated errors tend to reinforce each other.

[RivieraKid]

Well Gelman claims the opposite.

[DavidSJ]

No, what Gelman says is that he suspects that to compensate for the fat tails in 538's state distributions, they had to reduce the between-state correlations, to get a desired overall level of uncertainty.

This implies that correlations increase, rather than decrease, the overall level of uncertainty.

This is also easy to see from a basic probability perspective, using the concept of variance. For example, if you have two coin flips, with outcomes {-1, +1} chosen uniformly at random, then the sum has variance 2 if the flips are independent, but variance 4 if the flips are perfectly dependent.

[RivieraKid]

No, here's what Gelman says:

> the lower the correlation between states, the more uncertainty you need for each individual state forecast to get a desired national uncertainty