The home team weather advantage and biases in the NFL betting market

We test price efficiency in the NFL point spread betting market by examining the relationship between betting line forecast errors and game day temperatures for 5463 NFL games from 1981 to 2004. Our main contribution to the existing literature is the identification of a mispriced acclimatization advantage associated with games played in extreme temperature conditions. Results suggest that game day temperature significantly affects team performance and that this information is not efficiently incorporated into bet prices.