Betting exchanges like Betfair are useful for identifying value bets because they reflect the wisdom of the crowd, providing a more accurate gauge of the true odds of an event. By comparing the odds offered by bookmakers to those on the exchange, you can spot discrepancies where the bookmaker's odds are higher. For instance, if the exchange shows odds of 4.0 for a runner, but a bookmaker is offering 5.0, this indicates a positive expected value bet on the bookmaker's site, as you're getting better odds than the market suggests.