Analysis of the predictive qualities of betting odds and FIFA World Ranking: evidence from the 2006, 2010 and 2014 Football World Cups

Abstract

The present study aims to investigate the ability of a new framework enabling to derive more detailed model-based predictions from ranking systems. These were compared to predictions from the bet market including data from the World Cups 2006, 2010, and 2014. The results revealed that the FIFA World Ranking has essentially improved its predictive qualities compared to the bet market since the mode of calculation was changed in 2006. While both predictors were useful to obtain accurate predictions in general, the world ranking was able to outperform the bet market significantly for the World Cup 2014 and when the data from the World Cups 2010 and 2014 were pooled. Our new framework can be extended in future research to more detailed prediction tasks (i.e., predicting the final scores of a match or the tournament progress of a team).