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A hedonic model of player wage determination from the Indian Premier League auction: Further evidence

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  • Liam J.A. Lenten
  • Wayne Geerling
  • László Kónya

Abstract

► Hedonic price models allow estimation of ‘fair values’ of professional cricketers in a unique open-auction framework, allowing inferences on bidding patterns. ► Players from India, with an X-factor and previous Twenty20 experience attracted systematic premiums in the auction. ► There is evidence of an economic ‘superstar’ effect—overbidding for star players and underbidding for lesser players.A range of cross-sectional models are estimated with a view to establishing the factors that determine the valuation of professional athletes in a highly-specialised sport, with an application to cricket's Indian Premier League (IPL). We distinguish between personal characteristic and playing ability factors, and with respect to the former, between ability in different forms of the sport. We find a number of interpretable variables that have explanatory power over auction values, while decomposition according to batting and bowling specialisations produces very different results depending on the use of either Test or One-Day International (ODI) variables. There is also possible evidence of inefficient bidding, insomuch that overbidding was somewhat correlated with players with higher realised values.

Suggested Citation

  • Liam J.A. Lenten & Wayne Geerling & László Kónya, 2012. "A hedonic model of player wage determination from the Indian Premier League auction: Further evidence," Sport Management Review, Taylor & Francis Journals, vol. 15(1), pages 60-71, January.
    • Handle: RePEc:taf:rsmrxx:v:15:y:2012:i:1:p:60-71
    DOI: 10.1016/j.smr.2011.01.002
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    Cited by:

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    2. Siddhartha K. RASTOGI, 2017. "What’s a Cricketer’s Worth? Predicting Bid Prices for Indian Premier League Auctions," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 127-133.
    3. Soumyakanti Chakraborty & Anup K. Sen & Amitava Bagchi, 2015. "Combinatorial Auctions for Player Selection in the Indian Premier League (IPL)," Journal of Sports Economics, , vol. 16(1), pages 86-107, January.
    4. Arnab Adhikari & Adrija Majumdar & Gaurav Gupta & Arnab Bisi, 2020. "An innovative super-efficiency data envelopment analysis, semi-variance, and Shannon-entropy-based methodology for player selection: evidence from cricket," Annals of Operations Research, Springer, vol. 284(1), pages 1-32, January.
    5. Wei Yin & Zhixiao Ye & Wasi Ul Hassan Shah, 2023. "Indices Development for Player’s Performance Evaluation through the Super-SBM Approach in Each Department for All Three Formats of Cricket," Sustainability, MDPI, vol. 15(4), pages 1-20, February.

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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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