Economists predict Spain wins Euro Cup

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) and 2010 (World Cup, Spain) German researchers successfully forecasted who would win the major soccer tournament.  The team from FU Berlin and DIW Berlin created an economic model which takes into account market value of individual players and overall homogeneity of entire teams.

Strong correlation between market value and performance

Report authors, Jürgen Gerhards, Michael Mutz und Gert Wagner, argue that following the lifting of international transfer barriers the global market for soccer talent has become increasingly efficient. In addition to that, scouts, managers and trainers permanently observe talented players. Both factors would make it possible to approximate performance of individual players by their market value.

To support this hypothesis, the researchers gathered data from 25 leagues tracing total market value of soccer teams and their success in points gained. They managed to establish the following relationship:

market value

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

EURO 2012 predictions

According to these forecasts, Spain has the greatest chances of winning the EuroCup. This is due to its very balanced team and great total market value. Germany comes in second and will face Italy 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 Freie Universität Berlin you may find here