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

Author

Listed:
  • 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
    as

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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. 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.
    3. 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.
    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.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. 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.

    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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