Selection Biases in Sports Markets

Abstract

This article tests for the existence of two types of selection biases in sports markets. First, the better-educated players and players of higher socioeconomic background have better outside opportunities. If they decide to follow a professional soccer career, they must be truly good to compensate their higher opportunity costs. Second, if innate athletic talent is distributed equally among the population, we should not find any difference in the performance evaluation of White and non-White players. This potential difference provides a ‘‘market test’’ for discrimination. Using data on the Uruguayan Soccer League in the 2000 and 2001 seasons, we find evidence of these two types of selection biases. Our estimations show a positive relationship between education and performance, education and promotions, socioeconomic background and performance, socioeconomic background and promotions, and discrimination against non-White players in the national league but not with respect to international soccer markets.