Economists generally have enough sense to know that they know nothing about horse races. There are people who do. They are called tipsters.

Every Melbourne Cup Day, their tips are published in major newspapers. Today we have taken the tips published by racenet.com.au. We have taken 9 of those tipsters and from these tipsters we construct our most favoured rating.

Every horse nominated to win gets 3 points. Every horse nominated to come in second gets 2 points. Horses nominated to come in third get 1 point.

Today, the total points provided are:

1. Absurde: 10 points;
2. Onesmoothoperator: 9 points;
3. Vauban: 9 points;
4. Buckaroo: 4 points;
5. Okita Soushi :1 point and
6. Land Legend: 1 point.

In order to generate the value for each horse, we multiply these points by the odds. The odds in the electronic market at 9.00am this morning for these horses were:

1. Absurde: $9.50;
2. Onesmoothoperator: $8.50;
3. Vauban: $7.00;
4. Buckaroo: $7.00;
5. Okita Soushi: $13.00 and
6. Land Legend: $13.00.

When we multiply the odds by the most favoured rating, the results yield:

1. Absurde: 95 points:
2. Onesmoothoperator: 76.5 points;
3. Vauban: 63 points;
4. Buckaroo: 28 points;
5. Okta Soushi: 13 points’
6. Land Legend: 13 points.

The most favoured rating, the odds and our calculation of value points is shown in the table below.

So, what’s the tip?

Our recommendation this year is for an each-way bet on horse no. 9 — Absurde.

Remember our recommendation is for the best value bet rather than for the highest probability of winning.