Ninth International Conference on Sport & Society

Abstract

Using data from all FIFA World Cup competitions that took place between 1994 and 2010, a logit model is estimated to forecast the likelihood of success of each team in each tournament. The model correctly identifies the winner in 4 out of the 5 tournaments, and among many variables considered, hosting the tournament, the team’s quality, and the stage of the generational cycle of the players are found to be the key contributors to its forecasting performance. We used the recent 2014 World Cup as an ambitious test for the model’s ability to forecast the winner at future tournaments. Our results (as of February 2014) indicated Germany was the favorite to win the cup, followed by Argentina. Those were precisely the teams that met in July at the final, with Germany lifting the trophy. We make use of the model in two different regards. First, the ability of FIFA’s rankings to serve as a measure of teams’ relative strength is evaluated and rejected. Specific suggestions on how to improve their current ranking methodology are presented. Second, using bookmakers’ odds and model probabilities, we show that a sophisticated bettor could (consistently) make a profit. Therefore, our results suggest deviations from efficiency of the betting market as well.