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Determining the drivers of player valuation and compensation in professional sport: traditional economic approaches and emerging advances

In: Personnel Economics in Sports

Author

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  • Christian Deutscher

Abstract

An overview of the literature studying player performance and salaries is provided. The chapter argues that the ‘traditional’ approaches tended to view the drivers of players’ salaries as falling into one of four broad categories – experience, performance, talent, and popularity. It notes that using just these traditional drivers is deficient in that, collectively, they usually fail to explain 30 to 40 percent of the variation in salaries. It then discusses new advances in the literature that attempt to better incorporate into salary models factors like non-cognitive skills and work habits, and explains how researchers are now examining such player-characteristics as leadership skills, performance under pressure, and performance volatility to determine which, if any, of these factors may impact salary.

Suggested Citation

  • Christian Deutscher, 2018. "Determining the drivers of player valuation and compensation in professional sport: traditional economic approaches and emerging advances," Chapters, in: Neil Longley (ed.), Personnel Economics in Sports, chapter 4, pages 73-87, Edward Elgar Publishing.
  • Handle: RePEc:elg:eechap:17319_4
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    Cited by:

    1. Carlo Bellavite Pellegrini & Raul Caruso & Marco Di Domizio, 2021. "Relative wages, payroll structure and performance in soccer. Evidence from Italian Serie A (2007-2019)," DISCE - Quaderni del Dipartimento di Politica Economica dipe0015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    2. Tommy Quansah & Bernd Frick & Markus Lang & Kieran Maguire, 2021. "The Importance of Club Revenues for Player Salaries and Transfer Expenses—How Does the Coronavirus Outbreak (COVID-19) Impact the English Premier League?," Sustainability, MDPI, vol. 13(9), pages 1-22, May.
    3. Marco Di Domizio & Carlo Bellavite Pellegrini & Raul Caruso, 2022. "Payroll dispersion and performance in soccer: A seasonal perspective analysis for Italian Serie A (2007–2021)," Contemporary Economic Policy, Western Economic Association International, vol. 40(3), pages 513-525, July.

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    Keywords

    Economics and Finance;

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