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.
| Original language | English |
|---|---|
| Pages (from-to) | 1725-1737 |
| Number of pages | 13 |
| Journal | Journal of Finance |
| Volume | 52 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 1 Jan 1997 |