Whenever some important sports event looms, the popular press inevitably comes up with articles about the loss of productivity during said event. The quoted numbers have always been a mystery to me, as I have yet to see any serious study about this. Well, now there is one, sort of.
Michael Ehrmann and David-Jan Jansen analyze stock market activity during the 2010 FIFA World Cup in South Africa. Using minute by minute activity from 15 stock markets, they find that there are markedly fewer trades when games are on, especially when the home side plays, roughly half of normal trades. That may be because traders are less attentive to markets, but also because domestic investor are less on the ball, so to say. The effect is amplified by goals.
There are other times when attention is decreasing, such as lunchtime. The decrease in trades may have some welfare implications, as some arbitrage opportunities are not taken. However, it appears to be more serious that there is a change in patterns for prices during those football matches, unlike lunch time. Indeed, the cross-section of returns across firms is lower, and the correlation of domestic prices with world prices drops by 20% when a game is on. I cannot quite quantify how much of a welfare consequence this is, I would need a model for that, but I guess this is not negligible. NB: these effects are also present on US stock markets, despite the marginal interest in soccer.
Showing posts with label sports. Show all posts
Showing posts with label sports. Show all posts
The impact of poor scheduling of international football tournaments on English GCSE results
For every big sports event, there are two types of economic studies that make the news: the ones about the economic impact, which essentially add up all the expenses somewhat related to the event (sometimes applying a multiplier), never mind the fact that all this could have been spent on something else, and the studies about productivity losses because people are sleepy or distracted at work. I remember from school days that these events would also have a tendency to fall on exam period, which was a serious drag on exam preparation. How much? Someone finally figured it out.
Robert Metcalfe, Simon Burgess and Steven Proud exploit the fact that every two years a major international football tournament overlaps with important exams at the end of compulsory schooling in England. And their results are not pretty: male students as well as disadvantaged students suffer disproportionately from the competition for their attention. From them, exam scores are reduced by 0.2 standard deviations, which substantial, and as the authors note as large as some policy interventions. Just rescheduling those exams could be more effective than pouring money into some school initiatives.
Robert Metcalfe, Simon Burgess and Steven Proud exploit the fact that every two years a major international football tournament overlaps with important exams at the end of compulsory schooling in England. And their results are not pretty: male students as well as disadvantaged students suffer disproportionately from the competition for their attention. From them, exam scores are reduced by 0.2 standard deviations, which substantial, and as the authors note as large as some policy interventions. Just rescheduling those exams could be more effective than pouring money into some school initiatives.
Athletes are more competitive, but also more destructively envious
Student athletes are better than average students, despite having some sports severely dragging down this record. My impression is that these students know that they have less time to study and thus do not fool around like the others. They develop superior time management skills and thus obtain better results with less time to study.
Another aspect I did not think about is that athlete are more competitive. It is in part selected and in part learned: they get into sports because they are competitive, and they become competitive because they are athletes. Jérémy Celse shows that this is a mixed blessing, though. Once they have graduated, they also get an edge from being competitive and used to compete. However, athletes are less cooperative and find satisfaction in hurting others. Using an experimental approach, Celse finds that (self-declared) athletes behave anti-socially and with more jealousy than others when learning they did worse than their experiment partners (or opponents). In other words, do not count on athletes to be team workers. It is unclear whether this applies also for those practicing team sports. The variable was captured, but I see no result using it.
Another aspect I did not think about is that athlete are more competitive. It is in part selected and in part learned: they get into sports because they are competitive, and they become competitive because they are athletes. Jérémy Celse shows that this is a mixed blessing, though. Once they have graduated, they also get an edge from being competitive and used to compete. However, athletes are less cooperative and find satisfaction in hurting others. Using an experimental approach, Celse finds that (self-declared) athletes behave anti-socially and with more jealousy than others when learning they did worse than their experiment partners (or opponents). In other words, do not count on athletes to be team workers. It is unclear whether this applies also for those practicing team sports. The variable was captured, but I see no result using it.
Which childhood sport is more promising for labor market outcomes
Which sport should you encourage your child to adopt? My guess would be cross-country running, swimming and rowing, which have all the important characteristic of encouraging perseverance and long-term planning. They also make your child hang out with the "right people" as these athletes feature prominently among the best students. But these are just my impressions, let us see what can be done with more than anecdotal data.
Charlotte Cabane and Andrew Clark look at US schools, although not quite at the level of athletic detail I would have wished. Healthy students are more likely to participate in sports and later be successful in life. But those participating in sports are also more likely to be healthier. The direction of the causation is not clear. But of interest here is whether participation is sports is an important determinant in latter outcomes. Using the National Longitudinal Study of Adolescent Health, which looks at students who were in grades 7-12 in 1994-95, they can track how the students are doing as late as 2008. In the end, participating in team sports once a week as a student increases the hourly wage by 1.5%. Not a lot but still significant, especially as this for adults in their thirties, and gaps tend to widen later on. Individual sports seem only to have an impact for adult outcomes of girls.
Charlotte Cabane and Andrew Clark look at US schools, although not quite at the level of athletic detail I would have wished. Healthy students are more likely to participate in sports and later be successful in life. But those participating in sports are also more likely to be healthier. The direction of the causation is not clear. But of interest here is whether participation is sports is an important determinant in latter outcomes. Using the National Longitudinal Study of Adolescent Health, which looks at students who were in grades 7-12 in 1994-95, they can track how the students are doing as late as 2008. In the end, participating in team sports once a week as a student increases the hourly wage by 1.5%. Not a lot but still significant, especially as this for adults in their thirties, and gaps tend to widen later on. Individual sports seem only to have an impact for adult outcomes of girls.
Referee home bias
Referees are supposed to be impartial. In academics, this is most of the time helped by the fact that they are anonymous. In sports, referees are public and meeting participants, including spectators, try to influence them. This becomes particularly relevant when the referee has to take a decision against the home team than leaves spectators irate. They could retaliate against him. Does this influence referees?
Andrés Picazo-Tadeo, Francisco Gónzalez-Gómez and Jorge Guardiola Wanden-Berghe look at first division football in Spain, carefully taking into account stadium capacity, how full it is, how far spectators are from the pitch, and referee experience. They find that awarding a free kick does not have a home bias, which is consistent with the fact that this is a split-second decision. The ensuing decision to give the offending player a caution is, however, affected by home bias. This decision is not instantaneous, and social pressure can be exerted on the referee, especially when the stadium is full. The presence of a running track that separates the local supporters form the action does not seem to matter, though. I wonder whether some teams have a larger home bias than others, as the fans' reputation could also influence referees.
Andrés Picazo-Tadeo, Francisco Gónzalez-Gómez and Jorge Guardiola Wanden-Berghe look at first division football in Spain, carefully taking into account stadium capacity, how full it is, how far spectators are from the pitch, and referee experience. They find that awarding a free kick does not have a home bias, which is consistent with the fact that this is a split-second decision. The ensuing decision to give the offending player a caution is, however, affected by home bias. This decision is not instantaneous, and social pressure can be exerted on the referee, especially when the stadium is full. The presence of a running track that separates the local supporters form the action does not seem to matter, though. I wonder whether some teams have a larger home bias than others, as the fans' reputation could also influence referees.
Does hosting Olympic Games matter after all?
Is seems to be common knowledge that attracting big sports events is good for business and especially tourism. I have never found this argument particularly compelling, after all it is mostly local residents who attend such events. And previous research I reported on gives me right: in the case of the Atlanta Olympics, the impact was very short-lived and limited to the tourism industry. But maybe there is more and better evidence.
Markus Brückner and Evi Pappa take a different approach form the traditional impact study: they look at macroeconomic aggregates and focus on the anticipatory effect during the bidding process for the Olympic Games. The fact that a country is bidding gives people an indication that aggregate demand may increase in the future, especially if the country is selected into the last set of candidates. This anticipation can increase economic activity right now. Brückner and Pappa study a panel of 184 countries over 57 years. They find higher GDP growth during the five years before hosting, peaking at four years when the next host is announced. As expected, the impact fades quickly for unsuccessful bidders. And results are robust for World Exhibitions, but strangely reversed for Football World Cups. In all that, I wonder whether bidding for such large events is in fact exogenous. Indeed, you only want to bid if you have a healthy economy, especially if the event is large like the Olympic Games.
Markus Brückner and Evi Pappa take a different approach form the traditional impact study: they look at macroeconomic aggregates and focus on the anticipatory effect during the bidding process for the Olympic Games. The fact that a country is bidding gives people an indication that aggregate demand may increase in the future, especially if the country is selected into the last set of candidates. This anticipation can increase economic activity right now. Brückner and Pappa study a panel of 184 countries over 57 years. They find higher GDP growth during the five years before hosting, peaking at four years when the next host is announced. As expected, the impact fades quickly for unsuccessful bidders. And results are robust for World Exhibitions, but strangely reversed for Football World Cups. In all that, I wonder whether bidding for such large events is in fact exogenous. Indeed, you only want to bid if you have a healthy economy, especially if the event is large like the Olympic Games.
Do professional sports teams belong on the stock market?
Professional sports clubs exist to win, but this often requires money. Different models have developed in this regard. The US model is private ownership of clubs within a cartel, where private ownership is meant to be a single person, or a small group of people. The European model is broad membership with few benefactors who do not own the club, and clubs operate within an open league system (promotion and relegation based mostly on sport results). But over the last two decades a good number of European clubs went public and are now listed on stock markets. This highlights a change of priorities, profits over sport results, although the two are clearly correlated. But how well do these clubs fare?
Michel Aglietta, Wladimir Andreff and Bastien Drut note that the performance of sports stock is rather weak, and thus has not attracted institutional investors as was probably hoped for. This weak performance is not that surprising, I suppose many hold such stock to frame it above the TV set. It may also be due, as the authors argue, to the fact that sports clubs have poor governance. So, maybe the next step is to run them like a business where the objective is to maximize shareholder value, and make sport results only a means to generate these profits.
Michel Aglietta, Wladimir Andreff and Bastien Drut note that the performance of sports stock is rather weak, and thus has not attracted institutional investors as was probably hoped for. This weak performance is not that surprising, I suppose many hold such stock to frame it above the TV set. It may also be due, as the authors argue, to the fact that sports clubs have poor governance. So, maybe the next step is to run them like a business where the objective is to maximize shareholder value, and make sport results only a means to generate these profits.
Football has an impact on college quality
US faculty members are currently quite frustrated with sports programs on their campuses as the swallow substantial budgets at the expenses of academics. Very very programs yield a profit, even (American) football is in deficit save for a handful of colleges. And coaches get salaries that are completely disproportionate to the academic mission of universities. Then why are universities willing to invest all this money in sports? The standard answer that this builds alumni loyalty cannot be good, as they typically donate to the athletic foundation, which is run independently from academic budgets. The only advantage, so to speak, are that they reduce the deficit that needs to be covered by academic funds. Another argument is that it attracts better students. I can believe that for some sports, where student athletes are better than the general student population. But there should be better ways to attract good students, like merit scholarships.
Sean Mulholland, Aleksandar Tomic and Samuel Sholander claim that even the football program improves the academic quality of the student body. It is not that the football player are academically gifted, they are certainly not, but it is all about attracting other students. Their assessment is not based on actual fact, but rather on peer evaluation of faculty and university administrators, as they are records in the US News and World Report college rankings. And the better a sports team is, also from peer evaluation by football coaches, the better is the academic reputation of the student body. Now that the rumors have been established, it would be good to back this up with facts...
Sean Mulholland, Aleksandar Tomic and Samuel Sholander claim that even the football program improves the academic quality of the student body. It is not that the football player are academically gifted, they are certainly not, but it is all about attracting other students. Their assessment is not based on actual fact, but rather on peer evaluation of faculty and university administrators, as they are records in the US News and World Report college rankings. And the better a sports team is, also from peer evaluation by football coaches, the better is the academic reputation of the student body. Now that the rumors have been established, it would be good to back this up with facts...
Video review in football/soccer
The Australian Football Association has started to implement post-match video reviews to help in refereeing games and in particular uncover things the field referee may not have seen. The most striking example so far has been the reversal of an added-time penalty kick that followed a dive by an attacker. The diver is now suspended for two games, and the goalie got his red card reversed.
After the multiple controversies in the last World Cup about outcome determining refereeing errors, FIFA has been adamant that it is not considering overriding the authority of the referees on the field. The Australian initiative is definitively a thorn in the eye of FIFA, and it will be interesting to see how the football politics pan out.
But beyond this, this could lead to particularly interesting behavior on the field. Suppose a penalty kick is awarded on a dive. The diver, knowing that the decision could be reversed after the fact and new punishments could be handed out, could volunteer and ask the referee not to give the penalty kick. Should the referee accept this plea that undermines his authority on the field? Obviously his authority off the field is lost with post-match video reviews, but his decisions still have an impact.
In any case, I would love to see this implemented in Southern European leagues or in South America. It would make football strategy even more interesting.
After the multiple controversies in the last World Cup about outcome determining refereeing errors, FIFA has been adamant that it is not considering overriding the authority of the referees on the field. The Australian initiative is definitively a thorn in the eye of FIFA, and it will be interesting to see how the football politics pan out.
But beyond this, this could lead to particularly interesting behavior on the field. Suppose a penalty kick is awarded on a dive. The diver, knowing that the decision could be reversed after the fact and new punishments could be handed out, could volunteer and ask the referee not to give the penalty kick. Should the referee accept this plea that undermines his authority on the field? Obviously his authority off the field is lost with post-match video reviews, but his decisions still have an impact.
In any case, I would love to see this implemented in Southern European leagues or in South America. It would make football strategy even more interesting.
Subscribe to:
Posts (Atom)