An Evaluation of the Efficient Market Hypothesis Within the Context of Professional Golf: Do PGA Tour Events Affect Investor Sentiment?

Abstract

Every year, the PGA Tour hosts a schedule of golf tournaments sponsored by some of the world’s largest publicly traded companies. In this thesis, we compile a dataset of these tournaments along with the public sponsors’ next day abnormal returns, to determine if these stock returns are artificially affected by the investor sentiment of golf fans. Although there are some intriguing return values following the wins by Tiger Woods, major championships, and upset wins by very low ranked players, the relationships are not both statistically significant and robust. Thus, no abnormal conclusions can be made, making it appear that the efficient market hypothesis holds true on the trading days following PGA Tour events.