The NFL’s Home Underdog Bias: Timing and Weather

Rick Borghesi August 17th, 2007

I have been studying the underdog (reverse favorite-longshot) bias and find that the timing of the phenomenon is potentially interesting. The two papers that I’ve published on this topic are:

The Late Season Bias: Explaining the NFL’s Home Underdog Effect (PDF file) and;
The Home Team Weather Advantage and Biases in the NFL Betting Market (PDF file).

Although the latter was published first, I began writing it after the former was accepted for publication (unfortunately long backlog at the publisher). Each paper deals mainly with home underdogs, as I make the point that at least part of the underdog bias is a function of whether the underdog plays at home or on the road. That is, bets on home underdogs win at a rate greater than do bets on underdogs. The main idea, which is nicely summarized on this post published on the “Odd Numbers” blog, is that the home underdog bias in football occurs almost exclusively in the final two months of the NFL season. While this may or may not be the case in other sports, the timing of the bias potentially reveals something about the behavior of bettors and/or bookmakers.

In the first paper, I dedicate the majority of the analysis to show that removing late-season games makes the home underdog bias disappear, and briefly offer that bettors may fail to take into account the impact that winter weather conditions have on game outcomes. In the second paper, I gather weather data that enables me to contrast the temperature to which players are acclimatized and those which occur on gameday. It turns out that cold-weather acclimatization is an important determinant of game outcome, which is not surprising. What is surprising is that cold-weather acclimatization is also an important determinant of bet outcome.

The important question that remains unanswered is ‘why?’ Is it simply that weather is not part of the equation for gamblers? Probably not. Is there a relationship between this finding and that in Levitt (2004 - PDF file), who shows that bookmakers may exploit bettor biases? Do bookmakers take a naked position on the acclimatized team just as they do on heavy underdogs?

Incidentally, this weather bias is not limited to sides bets. In ‘Weather Biases in the NFL Totals Market (forthcoming),’ I show that a simple and profitable strategy can be implemented to take advantage of the relatively slow speed with which totals lines move in response to changing weather conditions. Temperature, rain, humidity and, even more so, wind, all affect the total number of points scored. These determinants are known with certainty only immediately prior to kickoff, yet gamblers place totals bets in the days prior to each event. What is the point of placing a totals bet before this information is known? Unless you know what no one else does, your risk (but not payoff) is greater.

Obviously, gambling is entertainment, and to some the risk must be a significant part of the reward.

Rick Borghesi