Selection Biases in Sports Markets
24 Pages Posted: 13 Sep 2006
Date Written: April 2006
Abstract
This paper tests for the existence of two types of selection biases in sports markets. First, better-educated players and players of higher socioeconomic background have better outside opportunities. If they decide to take the risks of a professional soccer career they must be truly good in order to compensate their higher opportunity costs. Second, if talent is distributed equally among the population, we should not find any difference in the performance evaluation of white and nonwhite players. This potential difference provides a "market test" for discrimination. Using data on the Uruguayan Soccer League in the 2000 and 2001 seasons we find evidence of these two types of selection biases. Our estimations show a positive relationship between education and performance, education and promotions, socioeconomic background and performance, socioeconomic background and promotions and discrimination against nonwhite players in the national league but not with respect to international soccer markets.
Keywords: sports economics, selection, education
JEL Classification: I20, J70, L83
Suggested Citation: Suggested Citation