A note on the endogeneity of the pay-performance relationship in professional soccer
AbstractTorgler and Schmidt (2007) have recently found a positive impact of pay on player performance in German soccer, measured by the number of goals and assists scored within a season. This note shows that their result is spurious as both a player's wage and goal/assist scoring are driven by individual playing abilities. Holding the (unobserved) time-invariant and the varying talent of a player constant, the positive pay-performance link is no longer statistically significant. In professional soccer, wages seem to buy talent rather than motivation.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 29 (2009)
Issue (Month): 3 ()
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Find related papers by JEL classification:
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- J4 - Labor and Demographic Economics - - Particular Labor Markets
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- Egon Franck & Stephan Nüesch, 2007.
"Wage Dispersion and Team Performance - An Empirical Panel Analysis,"
0017, University of Zurich, Center for Research in Sports Administration (CRSA).
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- Benno Torgler & Sascha Schmidt, 2005.
"What Shapes Players? Performance in Soccer? Empirical Findings from a Panel Analysis,"
CREMA Working Paper Series
2005-25, Center for Research in Economics, Management and the Arts (CREMA), revised Jan 2006.
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- Carlos Pestana Barros & Stephanie Leach, 2006. "Performance evaluation of the English Premier Football League with data envelopment analysis," Applied Economics, Taylor and Francis Journals, vol. 38(12), pages 1449-1458.
- Barros, Carlos Pestana & Garcia-del-Barrio, Pedro, 2008. "Efficiency measurement of the English football Premier League with a random frontier model," Economic Modelling, Elsevier, vol. 25(5), pages 994-1002, September.
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