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Sunday, March 26, 2006

A 'forensic economist' see point-shaving from statistical analysis of basketball games

Is there method in some of the March Madness of college basketball playoffs? Point shaving occurs in five percent of games with a spread higher than 12 points according to self-styled forensic economist Justin Wolfers in an interview with Jeff Mason. Wolfers is a University of Pennsylvania (Wharton School) professor who teaches the world’s only known course on the Economics of Sports Betting Markets. He extracted 9,244 games where teams were favored by 12 points or more from 44,120 college basketball games played between 1989 and 2005. Significantly, 46.2 percent of strong favorites won outright but failed to cover, which Wolfers thinks is a clear indication of point shaving. All a fellow has to do is miss on basket when his team leads by 10 points to come up short on the point spread of 12, thus making good on a big money bet. All this can be very tempting, so much so that the NCAA Gets Proactive On Gambling by inviting the FBI to talk with teams such as those going into the 2006 finals. Evidently players must get a lot smarter if they want to beat the system. Perhaps they had best pass on the basket-weaving classes and take a course on statistics!


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