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Relative wages, payroll structure and performance in soccer. Evidence from Italian Serie A (2007-2019)

Author

Listed:
  • Carlo Bellavite Pellegrini

    (Dipartimento di Politica Economica, DISCE, & Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore)

  • Raul Caruso

    (Dipartimento di Politica Economica, DISCE, & Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore - Catholic University ‘Our Lady of Good Counsel’, Tirana, European Center of Peace Science, Integration and Cooperation (CESPIC))

  • Marco Di Domizio

    (Dipartimento di Scienze Politiche, Università di Teramo - Centro Studi Economia Applicata (CSEA), Università Cattolica del Sacro Cuore)

Abstract

This paper investigates the role of payroll and its distribution in determining the seasonal performances of Italian football teams playing in Serie A. The novelty of our investigation lies in the introduction of a new extent upon which to compute traditional measures of dispersion of payroll. We calculate the coefficient of variation on real wages, on corrected wages and on weighted wages, using players’ characteristics, so that the players’ own perceived differences are considered. This aids us in testing for the role of envy in determining the teams’ performances. We exploit a data set on Serie A from 2007 to 2019, exploring the wages of 1,509 players in different seasons, to produce 4,633 total observations. Since Serie A is an open league with seasonal relegations and promotions, we have unbalanced panel data derived from 220 observations of 35 teams over 11 seasons. We use the percentage of points achieved by teams and a measure associated to the position of the team (rank) at the end of the first round of each season as dependent variables, and then we employ panel data techniques to estimate fixed effect models. We find a statistically significant association of team performance with relative wages and with previous results, while the salary dispersion seems to have no effect on performances. Moreover, by restricting our sample to teams that have never been relegated, and so balancing the panel, our empirical investigation validates the cohesion theory, since more equally weighted wages are associated with better on-field performances.

Suggested Citation

  • Carlo Bellavite Pellegrini & Raul Caruso & Marco Di Domizio, 2021. "Relative wages, payroll structure and performance in soccer. Evidence from Italian Serie A (2007-2019)," DISCE - Quaderni del Dipartimento di Politica Economica dipe0015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  • Handle: RePEc:ctc:serie5:dipe0015
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    File URL: http://dipartimenti.unicatt.it/politica-economica-DIPE0015.pdf
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    More about this item

    Keywords

    relative wage; payroll distribution; sport performance; Italian Serie A;
    All these keywords.

    JEL classification:

    • Z20 - Other Special Topics - - Sports Economics - - - General
    • Z22 - Other Special Topics - - Sports Economics - - - Labor Issues
    • Z21 - Other Special Topics - - Sports Economics - - - Industry Studies
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • J49 - Labor and Demographic Economics - - Particular Labor Markets - - - Other

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