Title

A Test for Bias of Inherent Characteristics in Betting Markets

Publication Title

Journal of Sports Economics

Publication Date

12-2011

Document Type

Article

DOI

10.1177/1527002510395864

Keywords

betting, market, NFL, efficiency, bias, home, underdog

Disciplines

Finance and Financial Management | Other Business

Abstract

The authors develop a model to investigate potential biases of inherent characteristics in betting markets. The test requires only that there be both a sides (‘‘spread’’) market and a totals (‘‘over/under’’) market for the game. The authors utilize the model to test for the well-documented ‘‘home-underdog’’ bias in the National Football League (NFL). They show that the bias specifically favors the offense (or defense) of home underdogs (away-favorites), with no bias against the offense (defense) of away favorites (home-underdogs).