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Statistical and economic efficiency of sports betting markets: Empirical research from Finnish football
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en
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25
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This paper evaluates weak form efficiency of online sport betting markets from statistical and economic perspectives. I focus my study on Finnish major football league Veikkausliiga examining 1394 matches played between seasons 2012 and 2018. To analyze statistical weak form efficiency, I apply linear regression model and grouping methods to examine whether historical betting odds are unbiased estimators of actual results. For economic weak form efficiency, I use tobit model and odds groupings to analyze whether returns of using simple unit betting strategy yield systematically non-positive returns. First, I find that betting market is not statistically weak form efficient in aggregate level and favorite-longshot bias, as well as reverse favorite-longshot bias, are observed. Second, my results provide evidence of marginally positive returns for unit betting strategy which violates also economic weak form efficiency.