Shorter Prices Can Mean Greater Value - Part 2

Last week we discussed the favourite/longshot bias which shows that the rate of return decreases as price increases. That is, punters tend to under-rate the winning chances of favourites and over-rate the winning chances of longer priced horses.

To demonstrate this is more than just a theory, today we'll take a look at the profitability of backing leading jockey's, trainers and sires.

Firstly let's take a look at leading Victorian jockey Brad Rawiller. Over the last five years if you were to back all of his mounts you would have lost around 8% on turnover (at TAB prices). But when we take a closer look at his figures, a typical favourite/longshot bias clearly emerges.

Brad Rawiller
Price range Profitability
Under $2.50 0% profit on turnover
$2.60 to $8 -3% POT
$8.10 to $16 -15% POT
$16.01 and over -45% POT

Now we'll look at Craig Newitt, runner-up in the jockey's premiership.
Price range Profitability
Under $2.50 -7% profit on turnover
$2.60 to $8 -17% POT
$8.10 to $16 -48% POT
$16.01 and over -60% POT

OK let's analyse the two leading trainers to see if the favourite/longshot bias also exists there.

Lee Freedman
Price range Profitability
Under $2.50 -2% profit on turnover
$2.60 to $8 -14% POT
$8.10 to $16 -32% POT
$16.01 and over -47% POT

David Hayes
Price range Profitability
Under $2.50 -20% profit on turnover
$2.60 to $8 -30% POT
$8.10 to $16 -28% POT
$16.01 and over -45% POT

And if you needed further proof, let's consider the results if you were to follow our two leading sires:
Encosta De Lago
Price range Profitability
Under $2.50 -13% profit on turnover
$2.60 to $8 -24% POT
$8.10 to $16 -29% POT
$16.01 and over -43% POT
Price range Profitability
Under $2.50 -10% profit on turnover
$2.60 to $8 -22% POT
$8.10 to $16 -28% POT
$16.01 and over -43% POT

So in every example above, whether it was a jockey, trainer or sire, there was a clear demonstration that the rate of return decreases as price increases.

As a punter you should ask yourself does this bias also apply to your own betting? I would be almost certain that it does, and with reasonable record-keeping you can answer that question definitively.

The favourite/longshot bias has existed for many years in racing, sports betting and financial markets and is unlikely to disappear any time soon. So use it to your advantage by focusing on shorter priced horses and your results should improve immediately.