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- Title
Testing Market Efficiency: Evidence From The NFL Sports Betting Market.
- Authors
Gray, Philip K.; Gray, Stephen F.
- Abstract
This article examines the efficiency of the National Football League (NFL) betting market. The standard ordinary least squares (OLS) regression methodology is replaced by a probit model. This circumvents potential econometric problems, and allows us to implement more sophisticated betting strategies where bets are placed only when there is a relatively high probability of success. In-sample tests indicate that probit-based betting strategies generate statistically significant profits. Whereas the profitability of a number of these betting strategies is confirmed by out-of-sample testing, there is some inconsistency among the remaining out-of-sample predictions. Our results also suggest that widely documented inefficiencies in this market tend to dissipate over time.
- Subjects
FOOTBALL betting; SPORTS betting; NATIONAL Football League; GAMBLING; PROBITS; GAMBLING systems
- Publication
Journal of Finance (Wiley-Blackwell), 1997, Vol 52, Issue 4, p1725
- ISSN
0022-1082
- Publication type
Article
- DOI
10.1111/j.1540-6261.1997.tb01129.x