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A comment on Paul, Weinbach, and Wilson’s (2004) “Efficient markets, fair bets, and profitability in NBA totals 1995-96 to 2001-02”

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  • Moore, Evan

Abstract

This paper revisits Paul et al. (2004) using a more recent data set to test for inefficiencies in the totals market for NBA games. Using data from the 1995-96 to 2001-02 seasons, Paul et al. (2004) found the market as a whole to be efficient, but that this was not the case for bets on the highest of point totals. Using data from the 2012-13 to 2018-19 seasons reveals a market that is more efficient than that of their earlier work, as the null hypothesis of a fair bet is not rejected for the higher totals. However, winning percentages in excess of 52.4 % were found further in the upper tail of the distribution of points totals relative to the earlier period.

Suggested Citation

  • Moore, Evan, 2021. "A comment on Paul, Weinbach, and Wilson’s (2004) “Efficient markets, fair bets, and profitability in NBA totals 1995-96 to 2001-02”," The Quarterly Review of Economics and Finance, Elsevier, vol. 82(C), pages 26-29.
    • Handle: RePEc:eee:quaeco:v:82:y:2021:i:c:p:26-29
    DOI: 10.1016/j.qref.2021.07.002
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    References listed on IDEAS

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    1. Kevin Krieger & Clay Girdner & Andy Fodor & David Kirch, 2013. "The Power Of Wagering On Power Conferences," Journal of Prediction Markets, University of Buckingham Press, vol. 7(1), pages 13-26.
    2. Paul, Rodney J. & Weinbach, Andrew P. & Wilson, Mark, 2004. "Efficient markets, fair bets, and profitability in NBA totals 1995-96 to 2001-02," The Quarterly Review of Economics and Finance, Elsevier, vol. 44(4), pages 624-632, September.
    3. Corey A. Shank, 2019. "NFL betting market efficiency, divisional rivals, and profitable strategies," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 36(3), pages 567-580, September.
    4. Sauer, Raymond D & Brajer, Vic & Ferris, Stephen P & Marr, M Wayne, 1988. "Hold Your Bets: Another Look at the Efficiency of the Gambling Market for National Football League Games: Comment," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 206-213, February.
    5. Gandar, John, et al, 1988. " Testing Rationality in the Point Spread Betting Market," Journal of Finance, American Finance Association, vol. 43(4), pages 995-1008, September.
    6. Kenneth Linna & Evan Moore & Rodney Paul & Andrew Weinbach, 2014. "The Effects of the Clock and Kickoff Rule Changes on Actual and Market-Based Expected Scoring in NCAA Football," IJFS, MDPI, vol. 2(2), pages 1-14, April.
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    More about this item

    Keywords

    Efficient markets; Gambling; Sports; Contrarian;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets

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