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Weather biases in the NFL totals market

Author

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  • Richard Borghesi
Abstract
I examine outcome predictability in the National Football League totals betting market using data from the 1984 through 2004 seasons. Results suggest that while weather is an important determinant of scoring, the market does not accurately incorporate the effects of adverse conditions into totals bet prices. Specifically, I demonstrate that heat, wind and rain reduce point production, and provide evidence that bettors underestimate this effect. I also present a betting strategy that accounts for expected weather conditions and produces an out-of-sample win rate significantly above the 52.38% profitability threshold.

Suggested Citation

  • Richard Borghesi, 2008. "Weather biases in the NFL totals market," Applied Financial Economics, Taylor & Francis Journals, vol. 18(12), pages 947-953.
    • Handle: RePEc:taf:apfiec:v:18:y:2008:i:12:p:947-953
    DOI: 10.1080/09603100701335432
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    References listed on IDEAS

    as
    1. David Hirshleifer & Tyler Shumway, 2003. "Good Day Sunshine: Stock Returns and the Weather," Journal of Finance, American Finance Association, vol. 58(3), pages 1009-1032, June.
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    3. William N. Goetzmann & Ning Zhu, 2005. "Rain or Shine: Where is the Weather Effect?," European Financial Management, European Financial Management Association, vol. 11(5), pages 559-578, November.
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    8. Bryan Boulier & H. O. Stekler & Sarah Amundson, 2006. "Testing the efficiency of the National Football League betting market," Applied Economics, Taylor & Francis Journals, vol. 38(3), pages 279-284.
    9. repec:bla:econom:v:54:y:1987:i:215:p:289-98 is not listed on IDEAS
    10. Golec, Joseph & Tamarkin, Maurry, 1991. "The degree of inefficiency in the football betting market : Statistical tests," Journal of Financial Economics, Elsevier, vol. 30(2), pages 311-323, December.
    11. Rodney J. Paul & Andrew P. Weinbach, 2002. "Market Efficiency and a Profitable Betting Rule," Journal of Sports Economics, , vol. 3(3), pages 256-263, August.
    12. Steven D. Levitt, 2004. "Why are gambling markets organised so differently from financial markets?," Economic Journal, Royal Economic Society, vol. 114(495), pages 223-246, April.
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    Cited by:

    1. Thomas J. Murray, 2018. "Examining the Relationship Between Scheduling and the Outcomes of Regular Season Games in the National Football League," Journal of Sports Economics, , vol. 19(5), pages 696-724, June.
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    3. B. Jay Coleman, 2017. "Team Travel Effects and the College Football Betting Market," Journal of Sports Economics, , vol. 18(4), pages 388-425, May.

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