An Exploratory Study on the Horse-Racing Winning Factors in Korea using Fixed Effects Logit Model - A Case of Gwachon Horse Race Track

This paper analyzes main factors to exert effects on horse-race winning which has not been identified in Korea, discussing people’s predictor variables and winning system. Fixed effects logit model is used to estimate impacts of institutional variables such as rating and weighting decided by horse racing authority, subjective variables constructed by betting people, and other information variables about horses and betting environments, using panel data from 2015 to 2018. Estimation results show that people make quite sophisticated estimation of their betting, contrary to popular knowledge in Korea, and that rating and weighting decrease differences of horses’ running abilities which is the well-known policy of horse racing authority in Korea to attract people’s interest in a tighter competition at the same time. However, the information asymmetry problem caused from long shot anomaly needs to be resolved by more information offering by winning function and smart data discussed in this paper. And to conclude, empirical results of winning function estimation offer people in track with detailed implications for more rational behavior and present possibility to raise the efficiency of horse race betting market smartly.