Economists predict Spain wins Euro Cup

Nieuws | de redactie

27 juni 2012 | A team of German researchers created an economic model which predicts who will win this year’s Euro Cup based on overall market value and homogeneity of participating teams. Their estimates indicate Spain has the greatest chances. The last 3 times their forecasts were spot on.

Already in 2006 (World Cup, Italy), 2008 (Euro Cup, Spain) and2010 (World Cup, Spain) German researchers successfully forecastedwho would win the major soccer tournament.  The team from FUBerlin and DIW Berlin created an economic model which takes intoaccount market value of individual players and overall homogeneityof entire teams.

Strong correlation between market value andperformance

Report authors, Jürgen Gerhards, Michael Mutzund Gert Wagner, argue that following the lifting of internationaltransfer barriers the global market for soccer talent has becomeincreasingly efficient. In addition to that, scouts, managers andtrainers permanently observe talented players. Both factors wouldmake it possible to approximate performance of individual playersby their market value.

To support this hypothesis, the researchers gathered data from25 leagues tracing total market value of soccer teams and theirsuccess in points gained. They managed to establish the followingrelationship:

The second important factor is homogeneity of the team. If themarket value of individual team members varies too much, a singlered card or an injured top player may shift the balance. Data onboth factors was used to create the following rank.

According to these forecasts, Spain has the greatest chances ofwinning the EuroCup. This is due to its very balanced team andgreat total market value. Germany comes in second and will faceItaly on Thursday ranking on place 5. Before that on Wednesday,Portugal (place 7) competes with Spain in the semi-finals.

The complete research report by DIW Berlin and FreieUniversität Berlin you may find here