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METP - Statistics World Cup

METP - Statistics World Cup. Elena Arias Marie-Paule Laurent Yvik Swan Solvay Business School Université Libre de Bruxelles Fall 2007. Goldman Sachs Report The World Cup and Economy (2002). Goldman Sachs Report The World Cup and Economy (2002).

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METP - Statistics World Cup

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  1. METP - StatisticsWorld Cup Elena Arias Marie-Paule Laurent Yvik Swan Solvay Business School Université Libre de Bruxelles Fall 2007

  2. Goldman Sachs ReportThe World Cup and Economy (2002) GS Report

  3. Goldman Sachs ReportThe World Cup and Economy (2002) GS Report

  4. Goldman Sachs ReportThe World Cup and Economy (2002) • What is the relationship between the economy and the football result? • What do you conclude from this graph and from the regression line? GS Report

  5. Goldman Sachs ReportThe World Cup and Economy (2002) • Extract of GS report GS Report

  6. Goldman Sachs ReportThe World Cup and Economy (2002) • Comment 1: • The presented model tries to explain country wealth by the level of its national football team. The results seem to show the existence of a positive relationship. • Underlying economic theory: a good FIFA ranking leads to such passion of the country’s population that people increase their consumption and/or their productivity, which implies the growth of national wealth!!!! • It is more intuitive to reverse the causality link and to consider that the performance of the football team depends on the average wealth of the population. • Comment 2: • The technique applied to the data: linear regression is applied on the variables in order to determine the link between them. • But, it is not because some software draws a straight line through a cloud of points that the results are automatically sensible. • Here: the observation of the distribution of the countries in the graph shows a dual structure with, on the one hand, countries with a high level of wealth (European Union, United States and Japan) and, on the other hand, other countries. GS Report

  7. Goldman Sachs ReportThe World Cup and Economy (2002) GS Report

  8. Goldman Sachs ReportThe World Cup and Economy (2002) • Our own analysis • Empirical study: • April 2002 FIFA ranking (www.fifa.com) • 2000 GDP per capita in USD (www.imf.org). • Objective: Explain the FIFA ranking by the GDP per capita and not the opposite. • Methodology: Separate the countries into two subgroups. • Group 1 (EU, USA and Japan): better average ranking and negative correlation between performance and wealth. In this subgroup, the “poorer” countries are, the better the ranking. • Group 2 (all others countries): the ranking is lower on average but no clear structure appears. • The graph presents the average ranking for both groups as well as the estimated regression line for “rich” countries. The regression line for “poor” countries is not drawn, as the dependence is not confirmed. The dotted line is the one given in the Goldman Sachs study. GS Report

  9. Goldman Sachs ReportThe World Cup and Economy (2002) • Our own analysis GS Report

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