Image: winteamb In Hong Kong, horse racing is nothing less than an institution. Every year, the Hong Kong Jockey Club conducts over 700 races, bringing in upwards of HKD 100 billion in betting turnovers. This makes the betting market ripe for some economic analysis. In this post, I will be investigating whether the market upholds the conditions for efficiency and rational behaviour. Economics, of course, assumes that human behaviour is consistent and rational. This blog has scrutinised this assumption previously, but this analysis will be done with specific reference to data from horse racing in California and in Hong Kong. The findings that inspired this blog post come from California (refer to "Further reading" below). To determine whether the betting market in Hong Kong displayed similar results, I analysed over 50,000 non-unique horses in more than 4,000 races spanning a six-year period from 2010 to 2015. (A detailed report on that analysis is in progress.)
An economics blog by Yashvardhan Mehra Bardoloi