DP17273 The Wisdom of No Crowds: The Reaction of Betting Markets to Lockdown Soccer Games

Author(s): Karl Whelan
Publication Date: May 2022
Keyword(s): COVID-19, home advantage, Market Efficiency, Soccer
JEL(s):
Programme Areas: International Macroeconomics and Finance
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=17273

The support of home spectators is one of the contributing factors to the home advantage effect in sports matches. The Covid-19 pandemic led to European soccer matches being played without spectators. We show that betting markets adjusted swiftly to account for a reduced home advantage in both goal difference and the probability of a win. These adjustments proved accurate over a large sample of soccer matches subsequently played without spectators even though the earliest games appeared to suggest a much bigger change in home advantage.