After last week’s papers on football, we now take a look at how the game of cricket has been analysed by economists. Very clearly, despite all the recent controversy surrounding it, the Indian Premier League (IPL) has changed the face of international cricket. But, notwithstanding all the financial shenanigans about team ownership in the IPL, is the selection of players above board? In other words, is the auction process watertight and efficient?
That’s the question researchers Craig A. Depken and Ramakrishna Rajasekhar have tried to answer in their paper.
There have been other papers on players’ salaries and the IPL. For example, in a paper in 2009, researchers Rastogi and Deodhar found that bid prices in the inaugural IPL season could be explained “using several player attributes including the batting average in Twenty20 international matches, batting strike rate in One-day International matches, half centuries, stumpings, and wickets in all four forms of cricket”.
Similarly, a 2008 paper by Parker, Burns and Natarajan found that in the first IPL season, player experience, strike rates for batting and bowling, iconic status and being an all-rounder had an effect on player salaries.
In their paper, Depken and Rajasekhar look at player valuations from the 2008, 2009 and 2010 seasons. Apart from asking what determines player salaries and whether the auction process is efficient, they also ask the following questions: whether the attributes of player valuation have changed over time; whether player salaries have been affected by the secondary rounds of auctions introduced in 2009; whether there is any discrimination against non-Indian players in the auction; and finally, whether “the salary cap and other labour market restrictions are having the intended consequence of ‘levelling’ the playing field and dissuading one or a select few franchises from paying higher prices for otherwise equally qualified players”.
Their results show that the greater the average number of runs per match and the average number of wickets per match, the greater the player’s salary, with a slight bias in favour of higher wickets. Iconic status and playing in a greater number of matches also increased players’ salaries. As expected, other things being equal, older players got lower bids. This is all perfectly in line with common sense and suggests that the auctions are working just fine.
There is, though, one rather inexplicable result: The prices of players at the secondary auctions dropped dramatically. The authors write that “the secondary auction impact suggests that there is something about these players beyond their obvious productivity statistics that made these players less desirable to have on a team”. The world ranking of the national team to which a player belonged made no difference to his salary.
Has the value of runs and wickets changed over time? The paper shows that over time, the value of bowlers has increased. Was there any discrimination among players of different nationalities? The researchers find no evidence of that, except for one quirky fact: the only statistically significant impact has been that?on players from Sri Lanka.
Do different teams pay more for players of the same talent? The only team that seems to be doing so is Kolkata. The authors say that this effect may simply be due to mistakes on the part of the Kolkata management as “the valuation of cricketers in the IPL is arguably a young science”.
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