Abstract
ABSTRACT Sports betting markets are an attractive setting to evaluate the degree to which publicly available information is efficiently incorporated into asset prices. Weather information represents one category of potentially undervalued public data, and we assess its impact on wagering outcomes and market behaviour in American college football. We uncover statistically significant effects of weather characteristics on totals market outcomes, indicating that the market does not appropriately assimilate this data into its forecasts. We also demonstrate that weather characteristics are not statistically significant predictors of totals market line movement magnitude. Together, these results suggest the market systematically undervalues weather data. We then develop simple wagering strategies utilizing only three weather characteristics and illustrate the ability to profit.
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