ABSTRACT
The growing popularity of football and the
continuing deregulation of the the gambling industry
in the UK mean that more attention is placed
on football results today than ever before. There is a tradition of modelling football matches
in the academic literature, in order to gauge the
relative quality of teams and to predict next week’s
results. Similarly, there has been a long history
of analyzing bookmaker odds: the gambling
market is important from an economic perspective
due to the parallels between gambling and
financial markets. The possibility of profiting from
badly-set odds as another incentive for studying
In this article, we apply a simple ordered probit
model to English football results. The ordered probit
model gives an objective rating of quality for all
English teams, and gives an indication of the size of
the home advantage – that is, the greater likelihood
that a team playing at home will win a match, ceteris
paribus. In order to compare model team ratings to
bookmaker opinion of teams, we apply an ordered
probit model of the same form to bookmaker odds.
