Fundamental comparative advantage versus random talent: An analysis using chess data

This paper analyzes the contribution of fundamental comparative advantage and random talent to explain differences in the number of expert chess players across countries. I posit a model where the quality of a chess player is determined by her innate talent and the fundamental comparative advantage of the country she is born. Using data on chess players FIDE ratings for 2015, I find that fundamental comparative advantage explains between 65% and 97% of the variation in the number of expert chess players across countries. Despite the appearance of chess servers that allow playing on-line and other tools to improve skills, I do not find convergence in comparative advantage over the period 2001-2015. I find that fundamental comparative advantage is highly positively correlated with the popularity of chess. These results highlight that a social preference might generate a more advanced technology which leads to a fundamental comparative advantage.