Statistical and economic efficiency of sports betting markets: empirical research from Finnish football
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School of Business |
Bachelor's thesis
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Date
2019
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Mcode
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Rahoitus
Language
en
Pages
25
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Abstract
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.Description
Thesis advisor
Kokkonen, JoniKeywords
Efficient market hypothesis, Favorite-longshot bias, Reverse favorite-longshot bias, Football, Fixed odds betting