Regional information and market efficiency: The case of spread betting in United States college football

Daniel D. Kuester, Shane Sanders

Research output: Contribution to journalArticlepeer-review

9 Scopus citations


Using game results over a seven year span (1999-2006), we find that United States college football teams in arid regions "win" against the spread in 56.64% of games in which they host a team from a humid region. This result provides statistically significant evidence for both weak and strong form inefficiency in the spread betting markets of such games. By examining other cases of intraregional and interregional competition within the sport, we conclude that this inefficiency does not arise from the effects of travel or home field advantage. Rather, the result indicates that climate aridity is an observed characteristic for which college football betting markets do not accurately control. It is quite rare to find strong form market inefficiency arise from a single variable rather than from an elaborate, multivariable betting strategy. Therefore, the effect of climate aridity upon college football spread betting market efficiency can be characterized as dramatic. It is conjectured that remote market participants may need to "experience" certain types of relevant regional information, such as climate, to act in a market efficient manner.

Original languageEnglish (US)
Pages (from-to)116-122
Number of pages7
JournalJournal of Economics and Finance
Issue number1
StatePublished - Jan 2011
Externally publishedYes


  • Market Efficiency
  • Regional Information
  • Sports Betting

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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