A Test of Unbiasedness and Sports Book Profits in the NFL Point Spread Betting Merket Using Circadian Advantage

Medical research shows that the human body typically performs at its best during late afternoon hours, and that the results of National Football League (NFL) games can partly be explained by differences in these levels of performance, coined the circadian advantage, when teams based in different time zones play against each other. This paper uses an augmented version of Dare and Holland’s (2004) generalized model to provide evidence that a circadian advantage bias exists in the NFL betting market. Detailed betting data used here supports results from Levitt (2004) and Paul and Weinbach (2007) by showing that sports books make use of the bias by setting odds that bait bettors who are unaware of the circadian advantage into making what tends to be a losing wager on the disadvantaged team.