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Understanding Price Movements in Point-Spread Betting Markets: Evidence from NCAA Basketball

Author

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  • Brad R Humphreys

    (Department of Economics, University of Alberta, 8-14 HM Tory, Edmonton, Alberta T6G 2H4, Canada.)

  • Rodney J Paul

    (Department of Sport Management, 810 Nottingham Road Syracuse, NY 13224, USA.)

  • Andrew Weinbach

    (Department of Accounting, Finance and Economics, E. Craig Wall College of Business Administration, Coastal Carolina University, P.O. Box 261954, Conway, SC 29528-6054, USA.)

Abstract

We analyze point-spread changes and betting volume for National Collegiate Athletic Association Division I men's basketball games using survival analysis techniques. Estimates based on point-spread changes from 2,548 games at the Hilton sports book and 1,681 games at the Mirage sports book in the 2007 season indicate that observed changes in point spreads are not related to imbalances in bet volumes. Sports books do not appear to change point spreads to induce equal volumes of bets on either side of propositions; the “balanced book” model of sports book behavior does not describe observed point-spread changes in this market.

Suggested Citation

  • Brad R Humphreys & Rodney J Paul & Andrew Weinbach, 2014. "Understanding Price Movements in Point-Spread Betting Markets: Evidence from NCAA Basketball," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 40(4), pages 518-534, September.
    • Handle: RePEc:pal:easeco:v:40:y:2014:i:4:p:518-534
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    Cited by:

    1. Krieger, Kevin & Fodor, Andy, 2013. "Price movements and the prevalence of informed traders: The case of line movement in college basketball," Journal of Economics and Business, Elsevier, vol. 68(C), pages 70-82.
    2. Miller, Thomas W. & Rapach, David E., 2013. "An intra-week efficiency analysis of bookie-quoted NFL betting lines in NYC," Journal of Empirical Finance, Elsevier, vol. 24(C), pages 10-23.

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