Does the Australian Football League Draft Undervalue Indigenous Australian Footballers?

Abstract

Economics assumes that behavior is based on rational expectations and market efficiency. However, previous research into professional sports indicates that there are cases where decisions are consistently made that do not conform to this. This article examines this issue within the context of how indigenous Australian footballers are recruited via the Australian Football League (AFL) draft. A panel data econometric model was used to look at the relationship between player performance and the expectations placed on these players when they were first drafted. The results show that, on average, indigenous Australian footballers outperform their expectations. Therefore, the question is ‘‘Why do AFL teams not draft more indigenous players?’’ Some of the reasons why teams may be averse to drafting such players are discussed, although we are unable to rule out irrationality as a possible explanation.