Is Moneyball Relevant on the Racetrack? A New Approach to Evaluating Future Racehorses

The market for racehorses is volatile and inefficient, and the ability to identify and exploit undervalued characteristics which predict performance can be profitable. In this article, we evaluate whether quantitative measures of physical structure and movement can help predict racing success and whether these measures are appropriately valued by the market. We discover an interesting dynamic: One measure predicting late racing development is a significant predictor of career earnings but is not valued by the auction market; a different measure predicting early racing development is valued by the marketplace but does not predict career earnings.