Rugbyonomics

When I was in grad school there was a guy doing his dissertation on the role of soccer in building a national identity in Nigeria, with his field research consisting of going to different stadiums to watch games and chat with people. I just got back from watching New Zealand’s opening two games at the Rugby World Cup in France, and while I did meet at the games with fellow Development Impact blogger Berk, can’t quite see a way to claim this as field research. But given the field of sports economics has studied game theory concepts like mixed equilibrium strategies in soccer penalty kicks and tennis serves, as well as whether reference-dependent preferences can explain marathon finish times, this got be wondering what the economics literature had to say about rugby, and whether there are any rugby impact evaluations.

One of my mentors as a young professor was the late John McMillan, a professor at Stanford’s GSB, who was a microtheorist who also did important development work on transition economies. He published a paper “Rugby meets economics” in the early years of the professional era of rugby, using organizational economics to look at the question of how much central control there should be versus decentralization in organizing games – with a trade-off between competitive balance and too much coordination undermining credibility and incentives. This idea that uncertainty of outcome makes for more exciting contests and greater fan interest has been tested in several papers that use regressions to look at what factors correlate with match attendance, and in a sort of difference-in-differences using a “natural experiment” that compares different policies in the English and French leagues to the start of professionalism on competitive balance. The results seem to suggest that fans like to watch more evenly matched teams play, but also love seeing their home team win, and don’t like bad weather.

This is all good news for fan interest in this World Cup, which looks to be the most evenly matched in years. Back in 2011 John Gibson and I wrote a blog post where we tried to measure the impact of New Zealand winning that year’s World Cup by looking at changes in the stock market to news about the chance of New Zealand winning taken from betting odds as the tournament unfolded. We concluded then that there was not enough variation to measure the impact, because New Zealand were just too good, so that winning was not that much news. Unfortunately that is not the case this year, and I watched France defeat New Zealand in the opening game, before seeing New Zealand beat Namibia in its second game. France, Ireland, and South Africa all look strong, and it was great to watch Fiji beat Australia yesterday. This paper uses the COVID-19 pandemic restrictions on crowd attendance to measure the impacts of home crowd advantage, and finds home field advantage is worth 6 points, dropping to 4 points without the crowd. So France is effectively starting a converted try ahead.  

I try to console myself with Argentina losing its first game of the soccer world cup and then going through to win the tournament. But it’s unclear who is the equivalent of Messi at the moment. This paper assesses whether Irish legend Brian O’Driscoll was really as great as the public perceived,  using the assumption of random injuries to identify his impact and finding he was worth 6 points a game to Ireland, approximately the same as New Zealand legends Richie McCaw and Dan Carter. So a star player may be the equivalent of home advantage. But the most recent players of the year are Irish player Josh van der Flier and French captain Antoine Dupont – suggesting France beating Ireland in the final is a real possibility. But this takes us back to the organizational economics – a stupid system for doing the draw could well have these two teams play each other in a quarter final. So there is all to play for, and plenty for spectators to enjoy the next few weeks!

For those of you somehow not interested in rugby, I’ll be back to regular posts soon. And in the meantime, you can see this as yet another lesson in how colonialism and climate help dictate long-term institutions.