Efficiency in Betting Markets: Evidence from English Football

Authors: Deschamps, Bruno; Gergaud, Olivier

Source: The Journal of Prediction Markets, Volume 1, Number 1, February 2007 , pp. 61-73(13)

We analyze the efficiency of English football betting markets between 2002 and 2006. We find evidence of a positive favourite-longshot bias for both home odds and away odds. Draw odds are instead characterized by a negative longshot bias. We also identify a draw bias in the sense that betting at draw odds yields a higher return than betting at home or away odds. Finally, we investigate betting strategies that exploit the variance of odds between bookmakers.

 

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