A Test for Bias of Inherent Characteristics in Betting Markets

The authors develop a model to investigate potential biases of inherent characteristics in betting markets. The test requires only that there be both a sides (‘‘spread’’) market and a totals (‘‘over/under’’) market for the game. The authors utilize the model to test for the well-documented ‘‘home-underdog’ ’ bias in the National Football League (NFL). They show that the bias specifically favors the offense (or defense) of home underdogs (away-favorites), with no bias against the offense (defense) of away favorites (home-underdogs)