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A Note on the Endogeneity of Pay-Performance Relationship in Professional Soccer


Nüesch, S (2009). A Note on the Endogeneity of Pay-Performance Relationship in Professional Soccer. Economics Bulletin, 29(3):1852-1857.

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) timeinvariant
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.

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) timeinvariant
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.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2009
Deposited On:21 Oct 2009 12:32
Last Modified:23 Nov 2018 18:49
Publisher:Economics Bulletin
ISSN:1545-2921
OA Status:Green
Official URL:http://www.economicsbulletin.com/

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