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A note on the endogeneity of the pay-performance relationship in professional soccer

Author

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  • Stephan Nüesch

    (University of Zurich)

Abstract

Torgler 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.

Suggested Citation

  • Stephan Nüesch, 2009. "A note on the endogeneity of the pay-performance relationship in professional soccer," Economics Bulletin, AccessEcon, vol. 29(3), pages 1850-1855.
    • Handle: RePEc:ebl:ecbull:eb-09-00413
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P33.pdf
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    References listed on IDEAS

    as
    1. Egon Franck & Stephan Nüesch, 2007. "Wage Dispersion and Team Performance - An Empirical Panel Analysis," Working Papers 0017, University of Zurich, Center for Research in Sports Administration (CRSA).
    2. Benno Torgler & Sascha Schmidt, 2007. "What shapes player performance in soccer? Empirical findings from a panel analysis," Applied Economics, Taylor & Francis Journals, vol. 39(18), pages 2355-2369.
    3. Carlos Pestana Barros & Stephanie Leach, 2006. "Performance evaluation of the English Premier Football League with data envelopment analysis," Applied Economics, Taylor & Francis Journals, vol. 38(12), pages 1449-1458.
    4. 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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    Cited by:

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    2. Tim R. L. Fry & Guillaume Galanos & Alberto Posso, 2014. "Let's Get Messi? Top-Scorer Productivity in the European Champions League," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(3), pages 261-279, July.
    3. Alberto Posso & Tim R. L. Fry & Michael Gangemi & George B. Tawadros, 2016. "¡Fútbol!," Journal of Sports Economics, , vol. 17(3), pages 219-233, April.

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    More about this item

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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