As noted earlier in Rethinking NFL Home Field Advantage Part I, Home Field Advantage (HFA) been proven to be MOST directly a function of referees being human. And although Vegas still prices HFA based on stadium, instead of humans, there is a clear opportunity to find market value there.
With that being said, if we assume Refs “create” the HFA as a function to please the crowd, shouldn’t we also consider the strength of the stadium’s crowd (input) on that ref’s decision? If so, we wanted to find teams that in the past 2 years have substantially performed better at home vs away in the NFL (Note: NOT who is good at home, but who is better at home THAN away to hone in on the actual HFA variable). To tease out variance and luck, we compared team total DVOA at home vs away to find outcomes that were more truly correlated to team performance than even W/L record. This is how it panned out (with a few surprises):
Taking the table above, our model will tie this together with “Best Refs” for Home Teams as broken down in the previous article as a form of multiplier, and price accordingly. We will track each variable’s impact on outcome, run a regression and apply each more appropriately in 2021 (but this is a great start). Doing this instead of using the “3 point rule” should give you a relative advantage in pricing over the books.