1. Simple Linear Regression NFL Point Spreads – 2007

2. Background Las Vegas Bookmakers provide a point spread for each game The spread reflects how many points the home team “gets” from the visiting team (negative values mean the home team “gives” points to visitor) If bookmakers are accurate, on average the actual difference should equal prediction Accurate ? How variable ?

3. Statistical model

5. Summary Statistics / Regression Equation

10. Testing normality of errors (I)

11. Testing normality of errors (Ii)

12. Example – NFL Spread errors

13. Testing accuracy in mean H 0 :      H A :    ≠  and/or    ≠  Fit Model UnDer H 0 : Y*=X Obtain error sum of squares under Y* Compare with error sum of squares from full model (H A ).

14. Testing for Accuracy