The Relationship between Sportsbook Volume, Forecast Accuracy, and Market Efficiency: The NFL and NCAA Football

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Published: Sep 12, 2014
DOI: https://doi.org/10.5750/jpm.v8i2.888
Keywords:
Betting NFL Volume Market Efficiency Bettor Biases

Main Article Content

Rodney Paul
Syracuse University
Andrew P. Weinbach
Professor of Economics, E. Craig Wall Sr. College of Business Administration, Coastal Carolina University
Kenneth Small
Associate Professor of Finance, E. Craig Wall Sr. College of Business Administration, Coastal Carolina University

Abstract

Using betting market volume data for the NFL and NCAA Football, we examine the role of betting volume as it relates to bettor biases, forecast accuracy, and volume-based betting market strategies.  We find that betting volume has a statistically significant effect on the percentage bet on the favorite, but its impact is different between the two levels of football.  Increased betting volume was shown to not have an impact on forecast accuracy in the sports.  Simple betting simulations revealed that underdogs win more than implied by efficiency in low-volume NFL games, but other strategies did not reject market efficiency.

Article Details

Issue
Vol. 8 No. 2 (2014)
Section
Articles
Author Biography

Rodney Paul, Syracuse University

Professor - Department of Sport Management - Syracuse UniversityPhD - Applied Economics - Clemson University 2000

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