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Betting markets for English Premier League results and scorelines: evaluating a simple forecasting model

Author

Listed:
  • J. James Reade

    () (Department of Economics, University of Reading)

  • Carl Singleton

    () (Department of Economics, University of Reading)

  • Leighton Vaughan Williams

    () (Nottingham Business School, Nottingham Trent University, UK)

Abstract

Using betting odds from two recent seasons of English Premier League football matches, we evaluate probability and point forecasts generated from a standard statistical model of goal scoring. The bookmaker odds show significant evidence of the favourite-longshot bias for exact scorelines, which is not generally present for match results. We find evidence that the scoreline probability forecasts from the model are better than what the odds of bookmakers imply, based on forecast encompassing regressions. However, when we apply a simple betting strategy using point forecasts from the model, there are no substantial or consistent financial returns to be made over the two seasons. In other words, there is no evidence from this particular statistical model that the result, scoreline, margin of victory or total goals betting markets are on average inefficient.

Suggested Citation

  • J. James Reade & Carl Singleton & Leighton Vaughan Williams, 2020. "Betting markets for English Premier League results and scorelines: evaluating a simple forecasting model," Economics & Management Discussion Papers em-dp2020-03, Henley Business School, Reading University.
  • Handle: RePEc:rdg:emxxdp:em-dp2020-03
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    File URL: http://www.reading.ac.uk/web/FILES/economics/emdp202003.pdf
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    More about this item

    Keywords

    Forecasting; Statistical modelling; Regression models; Prediction markets;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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