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A Note on the Evidence of Adverse Selection from Thoroughbred Wagering – Further Evidence in Australia

Robert Wrathall


Chezum and Wimmer (2000) show the impact of asymmetric information in the American thoroughbred industry by demonstrating that homebreds (horses retained and raced by their breeders), on average, have lower betting odds than otherwise similar nonhomebreds. In this paper we test their hypothesis in the Australian thoroughbred industry. While we find no relationship between lower betting odds and homebreds when we use their model, we are still able to support their conclusion when we use a logistic model to measure the relationship between homebred and horse performance.  

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Akerloff, George A. 1970. The Market for ‘Lemons’: Quality uncertainty and the market mechanism. Quarterly Journal of Economics 84: 488-500.

Australian Stud Book

Chezum, Brian and Bradley S. Wimmer. 2000. Evidence of Adverse Selection from Thoroughbred Wagering. Southern Economic Journal 66(3) 700-714

Racing NSW




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