Determinants of a Footballers Transfer Fee
Abstract
The essay looks at an empirical analysis into the main player and club characteristics that determine the transfer fee of a player. Using a competitive model and data from the Premier League spanning from July 2006 – September 2011, this paper will look to find and model the main factors that affect the price paid for a player. The paper will identify which characteristics directly affect the value of a transfer fee and the reasons behind these results.
1. Introduction
1.1 Outline
This essay will be looking at an empirical analysis of the many variables that are considered by a football club when determining the amount of money paid to acquire a player. The first section will give a brief introduction into the workings of the transfer market and the rules and regulations governing it. Section two will be a literary survey, discussing the similarities and differences with their findings. I will then undertake an econometric analysis of collected data and interpret my findings using economic theory.
There has been a lot of research on the main determinants of a transfer fee. But there has not been much research done recently and that is what this paper will be analyzing and seeing if there has been much change in what characteristics clubs look at and which characteristics have the biggest impact on the fee. The data that will be looked at are the Premier League transfers from July 2006 - August 2011. I will try to also determine the optimal age to sell a player and whether clubs will look to sell a player when he reaches this age. Also, when a player leaves at the end of his contract a fee is not paid to the selling club. This is difficult to prove as there is limited information on player’s contractual statuses and therefore it is very difficult to find reliable and accurate information on this. For this reason, I will try to calculate how much money players sold for a free transfer would have received if a fee had been payable using
The essay looks at an empirical analysis into the main player and club characteristics that determine the transfer fee of a player. Using a competitive model and data from the Premier League spanning from July 2006 – September 2011, this paper will look to find and model the main factors that affect the price paid for a player. The paper will identify which characteristics directly affect the value of a transfer fee and the reasons behind these results.
1. Introduction
1.1 Outline
This essay will be looking at an empirical analysis of the many variables that are considered by a football club when determining the amount of money paid to acquire a player. The first section will give a brief introduction into the workings of the transfer market and the rules and regulations governing it. Section two will be a literary survey, discussing the similarities and differences with their findings. I will then undertake an econometric analysis of collected data and interpret my findings using economic theory.
There has been a lot of research on the main determinants of a transfer fee. But there has not been much research done recently and that is what this paper will be analyzing and seeing if there has been much change in what characteristics clubs look at and which characteristics have the biggest impact on the fee. The data that will be looked at are the Premier League transfers from July 2006 - August 2011. I will try to also determine the optimal age to sell a player and whether clubs will look to sell a player when he reaches this age. Also, when a player leaves at the end of his contract a fee is not paid to the selling club. This is difficult to prove as there is limited information on player’s contractual statuses and therefore it is very difficult to find reliable and accurate information on this. For this reason, I will try to calculate how much money players sold for a free transfer would have received if a fee had been payable using
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