Football tipsters may be a thing of the past as an actuary predicts the winner and losers for this year's Premier League
Greg Becker, an actuary with RGA, has put his formidable mathematical skills to the test by demonstrating that through the use of actuarial, statistical and risk management techniques it is possible to build a model which can forecast who will win the Premier League 2010/2011.
At the Actuarial Profession’s Life conference, taking place in Birmingham from 7 to 9 November 2010, Greg will deliver a presentation using computer simulations and a technique known as Monte Carlo simulations, named after the casino capital of Europe. The detailed model has been tested against recent results, and shows how it would have been able to successfully predict the winner (and those teams who would be relegated) of the Premier League, had it been used at this stage last season.
However, Greg will warn delegates that betting statistics are often an even better indicator of future results. He said: “Since people are putting their money where their mouth is, and taking into account more information than a model ever could, they are the best predictors of the future. There are many examples of how a betting market can reflect diverse factors that affect the log, like player injuries, rumours of new signings, results in other competitions, so it is probably impossible to develop a model to take into account all these factors without introducing too much ‘model risk’.”
And the $64,000 question? “Unsurprisingly, my model is predicting Chelsea will win. But it’s bad news for the Hammers, Wigan Athletic and Wolves. If my predictions are correct, they will be relegated.”
On the accuracy of his model, Greg said: “I used a similar approach to model the World Cup and, once again argued for the use of betting statistics – which correctly predicted the winner. But I don’t want to be held responsible should any punters bet big and lose!”
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