Abstract

This study examines the pervasive influence of fan racism on the wages and transfer decisions of soccer players within the European leagues. This study delves into the significant yet often overlooked impact of fan racism on the economic aspects of soccer in European leagues. It posits that racial biases from fans distort the market value of players, leading to economic inefficiencies that not only affect immediate financial outcomes but also shape long-term career prospects and club strategies. By applying human capital economic theory, the research highlights how a player's skills and experience—elements central to their human capital—are ideally the determinants of their market value and wages. However, the presence of racial biases challenges this market principle, suggesting that players of equal skill and experience are valued differently based on race.

The central hypothesis of this study is that fan racism negatively impacts the wages and transfer opportunities of players, particularly non-white players, even when controlling for performance and experience. This hypothesis stems from the recognition that fan attitudes, reflecting broader societal biases, can influence club decisions, potentially leading to a systematic undervaluation of non-white players.

To explore this hypothesis, the research employs a robust empirical analysis leveraging regression models applied to a comprehensive dataset covering several years of player performance, wages, and transfer activities across the top European soccer leagues. The dataset includes variables that capture player performance metrics, racial background, club expenditure, and fan engagement indicators, among others. The use of multivariate regression techniques allows for a nuanced examination of the relationships between race, performance, and economic outcomes in soccer.

Key to the study is the exploration of how clubs navigate the isoquant and isocost model within the context of racial biases. This model illustrates the trade-offs clubs face when combining players of different races to achieve optimal team performance within given cost constraints. The analysis seeks to reveal if and how racial biases lead clubs to make suboptimal combinations of players, resulting in increased expenditures and compromised team performance.

The empirical findings reveal a statistically significant negative correlation between the racial background of players and their wages, even after controlling for performance, experience, and other relevant factors. Specifically, non-white players are found to receive lower wages compared to their white counterparts with similar performance levels, highlighting the economic penalties imposed by racial biases. Furthermore, the analysis indicates that clubs are less likely to invest in long-term contracts for non-white players, suggesting a hesitancy to commit substantial financial resources to players perceived to be less marketable due to fan racism.

Advisor

Long, Melanie

Department

Economics

Publication Date

2024

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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