Football experts versus sports economists: Whose forecasts are better?

Abstract

Given the uncertainty of outcome in sport, predicting the outcome of sporting contests is a major topic in sport sciences. This study examines the accuracy of expert predictions in the German Bundesliga and compares their predictions to those of sports economists. Prior to the start of each season, a set of distinguished experts (head coaches and players) express their subjective evaluations of the teams in school grades. While experts may be driven by irrational sentiments and may therefore systematically over- or underestimate specific teams, sports economists use observable characteristics to predict season outcomes. The latter typically use team wage bills given the positive pay–performance relationship as well as other factors (average team age, tenure, appearances on national team, and attendance). Using data from 15 consecutive Bundesliga seasons, the predictive accuracy of expert evaluations and sports economists is analysed. The results of separate estimations show that relative grade and relative wage bill significantly affect relative points, while age, tenure, appearances, and attendance are insignificant. In a joint model, relative grade and relative wage bill are still statistically significant, suggesting that the two types of predictions are complements rather than substitutes. Consequently, football experts and sports economists seem to rely on completely different sources of information when making their predictions.