Home advantage in professional soccer and betting market efficiency: The role of spectator crowds
利用德国职业足球在新冠疫情空场比赛的自然实验，研究发现主场优势下降且随时间恢复，博彩赔率短期未反映此变化但长期调整到位，并揭示了短期套利策略。
Abstract Fan support has often been considered to be a main driver of the home advantage in sports. Using the “natural exper‐ iment” of ghost games during the COVID‐19 pandemic in German professional soccer and a dataset of 6,120 matches ranging over the seasons 2011/2012 to 2020/2021, we test this claim. Indeed, applying a difference‐in‐differences setup, we identify a reduction in the home performance ‐ though with much heterogeneity across leagues and teams. We, moreover, observe the home advantage to recover over time. In analysing whether betting markets anticipated this drop in the home advantage and its recovery, we test the efficient market hypothesis. In the short‐run, betting odds do not properly reflect the effect of ghost games regarding changes in the home advantage but they suitably account for it in the long‐run. Also, league heterogeneity is efficiently captured in the odds. Based on these findings, we show how simple, short‐run betting strategies could have exploited the discussed phenomenon. Our findings also have implications for agents' behavior on financial markets in the presence of unforeseen and unfamiliar shocks.