Playing tennis in the heat
This weekend, the US Open will go into its final stages and we will eventually have a new champion. Players and audiences alike will probably be glad to see this US Open end given that the entire tournament was played in stifling heat with high humidity. The situation was so bad that Daniil Medvedev complained during his quarterfinal match that “one player is gonna die”.
Unfortunately, climate change being what it is, we have to expect that more workers, not just highly paid tennis stars will have to work in brutal heat in the future. Studies of low skilled workers like construction or farm workers show that higher temperatures can reduce productivity by a couple of percentage points.
But in tennis, a drop in performance by a few percentage points can make a big difference. So how do professional tennis players deal with heat and what can we learn about financial markets and the economy from that? Thanks to a team from Stanford University, we now have an answer.
Examining 15 years of data and 177,000 tennis matches, they find that the performance of tennis players drops significantly in hotter temperatures. The charts below summarise their findings. In the top row, we see that as it gets hotter, double faults increase and the probability of a player retiring goes off the charts. Meanwhile the average length of a rally and the distance run drops a lot. No surprise there. Playing a tennis match in the heat is physically demanding so people try to conserve energy as much as they can.
The more interesting results are shown in the bottom row. There we see that the serve speed slightly increases as temperatures increase. This reflects the fact that the air gets thinner and balls and the strings of a tennis racket more flexible as the temperature increases. This allows for increased serve speeds. The effect that works against this is that players lose focus and physical strength as it gets hotter, so the net effect is only a small increase in serve speeds.
The other interesting chart is chart g in the bottom row. It shows that players whose last match was played in hotter temperature than their opponents tend to lose more often. The physical and mental exhaustion of a match played in extreme temperatures can make all the difference in the next match when playing against a more rested player. Just ask Sasha Zverev how he felt playing against Carlos Alcaraz after his epic five set win against Jannik Sinner two days before.
The impact of temperature on tennis performance
Source: Burke et al. (2023)
But this change in win probability for players who have played in hotter conditions is where people may get a financial edge. Do betting odds reflect this impact of the weather on performance?
This study, to my surprise, finds that indeed betting odds shift away from players who played their last match in hotter temperatures to such a degree that there is no edge to be gained for gamblers. This is not something that we typically observe. In financial markets, hot weather is still frequently underpriced so that investors can get an edge by investing in companies that deal better with such extreme weather conditions.
One might even start to think that gamblers are smarter than the average investor…