Vsevolod Grabar, Konstantin Sonin, 20 October 2018

UEFA’s Financial Fair Play regulations, which aim to “introduce more discipline and rationality in club football finances”, have attracted significant criticism, with claims that their effect on competitive balance is uncertain and that they will deprive new clubs of a chance to take off. This column provides a theoretical argument to show that regulations such as salary caps or Financial Fair Play improve investors' incentives to bring money to clubs other than those in the top financial tier, helping to level the playing field.

Stefan Szymanski, 08 October 2018

Stefan Szymanski of the University of Michigan discusses how Financial Fair Play regulation brings little or no benefit for football fans or the players - the big winners are the owners of football clubs. The interview was recorded at the RES conference in 2014.

Eran Yashiv, 08 October 2017

The €222 million transfer of Neymar to PSG calls into question whether football superstars are a good investment. Using the financial details of the transfer, this column argues that, at the price paid, Neymar has a negative net present value. While there are other explanations for PSG's willingness to pay, in purely economic terms his contract seems a bad investment. Policymakers might use this type of calculation to justify intervening in the transfer market through regulation and taxation.

Doug VanDerwerken, Jacek Rothert, Brice Nguelifack, 09 February 2017

Most football leagues suspend players who have accumulated a certain number of yellow cards. This column describes the effect of this rule on the number of fouls committed by players in the English Premier League. Players who are approaching the suspension limit commit 33% fewer fouls than at the start of the season, and even in the first game of the season, the deterrent effect of the suspension rule reduces the number of fouls by 15%.

Roman Sittl, Arne Jonas Warnke, 18 September 2016

In sports economics, competitive balance refers to how well opponents are matched in terms of their ability to win. A lack of competitive balance implies that match outcomes will be more predictable and less interesting for fans. This column uses two decades of Bundesliga data to investigate whether competitive balance is decreasing in German football. Good players are increasingly playing for better teams, denoting a reduction in competitive balance. Although this reduction doesn’t seem to have affected fans’ interest, the results emphasise how revenue and regulations can affect competitive dynamics.

Luca Fumarco, Giambattista Rossi, 23 April 2016

A vast cross-discipline literature provides evidence that — in both education and sports — the youngest children in their age group are usually at a disadvantage because of within-group-age maturity differences, known as the ‘relative age effect’. This column asks whether this effect could last into adulthood. Looking at Italian professional footballers’ wages, the evidence suggests that the relative age effect is inescapable.

Dmitry Dagaev, Alex Suzdaltsev, 13 September 2015

Designing a tournament to keep each game or round as exciting as possible for spectators is, as you might imagine, complex and nuanced. Yet, most sporting tournaments use a basic ‘knock-out’ model, and have done for years. This column argues that tournament organisers ought to be more creative, and illustrates a model and examples suggesting that tournament organisers should not confine themselves to tradition. Choosing the proper scheme is a hard but feasible goal for tournament designers.

Stefan Szymanski, 24 June 2015

Football leagues around the world tend to be dominated by a tiny number of teams. This column applies Sutton’s theory of endogenous sunk costs to show that it’s all down to success begetting success, and success attracting more fans. Like big companies who dominate markets and still spend billions on advertising to maintain their market position, dominant teams remain dominant because they consistently win.

Pierre Deschamps, José De Sousa, 13 February 2015

Racial wage discrimination can proliferate in labour markets with large frictions because workers facing discrimination find it difficult to relocate. This column presents evidence of the interaction between frictions and discrimination in the English Premier League, the top tier of English football, using the 1995 Bosman ruling as an exogenous shifter. Before the ruling, wage discrimination resulted in teams with more black players outperforming competitors with equivalent payrolls. The decrease in frictions associated with the ruling allows players to escape discrimination by relocating.

Alex Bryson, Arnaud Chevalier, 15 August 2014

Racial gaps in wages are often attributed to discrimination but data limitations make drawing strong conclusions difficult. Economists usually distinguish between taste-based and statistical discrimination. This column presents evidence from a new test of taste-based discrimination. Examining hiring decisions in the English Fantasy Premier League, the authors do not find that employers discriminate based on race. One explanation for this is that good productivity measures minimise the opportunities for statistical discrimination, which according to studies drives the racial difference in market outcomes.

Nauro Campos, 13 June 2014

The 2014 FIFA World Cup is upon us. This column argues that there will be plenty of partying, but also plenty of protests fuelled by the gross mismanagement and limited economic benefits from hosting the Cup. Stadia may be ready, but much planned infrastructure has already been abandoned. Indeed, rent-seeking may be one reason nations bid for the Cup. Since the returns to transportation infrastructure are higher in poor countries, the international community should work to stamp out corruption so that poor countries can continue to host mega-events like the World Cup.

Dmitry Dagaev, Konstantin Sonin, 10 March 2013

In sport tournaments, the rules are presumably structured in a way that any team cannot be better off (e.g., to advance to the next round of competition) by losing instead of winning a game. Starting with a real-world example, the authors demonstrate that the existing national rules of awarding places for the UEFA Champions League and the UEFA Europa League might produce a situation where a team will be strictly better off by losing a game.

Rob Simmons, 03 September 2012

As the new football season kicks off, Europe’s top clubs are preparing to abide by UEFA’s Financial Fair Play initiative, designed to ensure financial discipline and make European football more competitive. But this column argues that the new rules could end up doing just the opposite.

Alex Bryson, Rob Simmons, Giambattista Rossi, 08 May 2012

Are migrants paid more or less than their native colleagues? This column provides a unique insight by looking at data from an industry where there are many foreigners and where their relative quality can be easily measured – professional football in Italy.

Emmanuel Saez, Henrik Kleven, Camille Landais, 06 January 2011

This month some of Europe’s most skilled footballers will switch clubs in deals worth millions of euros. This column analyses the movement of Europe’s footballers between the top 14 leagues and finds that a major influence on player decisions to move is the difference in the tax regime – with policy implications going well beyond the football pitch.

Alex Bryson, Babatunde Buraimo , Rob Simmons, 22 July 2010

After losing the football world cup final in South Africa, the Dutch press blamed the “chump” of a referee from England for losing control of the game. Yet this column presents evidence that, as one of the few countries where referees are paid a salary, English referees have the incentives to be among the best.

Jan van Ours, Martin van Tuijl, 15 June 2010

The 19th football World Cup is underway in South Africa. This column studies the achievements of the national teams of Belgium, Brazil, England, Germany, Italy, and the Netherlands since 1960. It finds that while home advantage, skill, and luck play their part, in the dying moments of a game national identity can step forward as well.

Alex Bryson, Bernd Frick, Rob Simmons, 07 December 2009

The study of sports is beginning to tell us more and more about the operation of labour markets and incentives. This column looks at football to verify that wages reflect marginal productivity. It shows that two-footedness – the rare ability to use both feet to pass, tackle, and shoot – commands a large wage premium.

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