As hosts Brazil kicked off the FIFA World Cup in Sao Paulo with its opener 3-1 victory over Croatia on Thursday, PwC has turned to ‘econometrics’ in a bid to determine success and failure at this major sporting event.
“In previous analyses of the Olympic Games, we found a strong link between medal totals and the size of the economy. But no such relationship has been found for the World Cup. Instead, key factors include the number of players available to each country, the national interest in football, long-term footballing tradition, and recent form,” explained PwC economist Dan Broadfield.
He said that researchers used historic data on the 56 countries who have played at least six World Cup games.
Strength of teams
The result of analysing all the key variables is a ‘PwC World Cup Index’ – a qualitative assessment of each country’s relative strength. This clearly indicates that Brazil are favourites this year, due to footballing tradition and home advantage; but Germany, Argentina and Spain will push them hard. Meanwhile, although England rank in the top eight on the index, they face a battle to progress from their group – given the slightly higher ranking of their direct rivals Italy and Uruguay.
The ‘host factor’
Modelling shows that, on average, host countries can expect to progress a further two rounds than if they were not hosting. There is also a clear ‘home region’ effect, with strong crowd support and familiar climatic conditions giving a potential boost this year to all the South American teams. An interesting statistic: a European country has never won a World Cup hosted in the Americas, while only once has a Latin American country won a World Cup in Europe – Brazil in Sweden in 1958.
Group of Death
Opinion is divided on which is the ‘Group of Death’ for the 2014 World Cup, with Groups D and G being the two toughest according to combined PwC index scores .
“Group D has the highest total combined score on our index and is therefore deemed to be the ‘Group of Death’,” said John Hawksworth, UK chief economist at PwC.
“This reflects the strong collective footballing tradition of Uruguay, England and Italy – three countries in the top ten of the all-time World Cup table that between them have won seven of the previous 19 trophies. It will be tough for England to qualify from this group but, if they do, they should have a decent chance to at least reach the quarter finals.”
Over and underachievers
The PwC paper establishes several variables which explain, to a significant extent, the differences in World Cup performance across countries. These are the number of registered football players, attendance at top division club matches, number of bids to host the World Cup, and whether the country is from Europe or South America.
PwC model estimates of each country’s total World Cup points compared to their actual points, which indicates whether each country has under or overachieved relative to model estimates.
Brazil is the most significant overachiever, collecting an additional 95 World Cup points compared to the PwC model estimate; they have consistently had greater success than other countries with a similar pool of registered players and level of club attendances.
England’s reputation among some as perennial underachievers is also justified to some degree by the fact that they have collected 26 fewer World Cup points than estimated by the model. But the largest underachievers are in fact the USA, who should have collected an additional 76 points according to the PwC model, given their abundance of registered football players and that they often bid to host the tournament. However, it should be noted that this estimate does not take into account the fact that a larger proportion of the USA’s total registered players are female than other countries. This is reflected in the fact that the USA has done much better in the Women’s World Cup.
The report is available for free download at http://www.pwc.com/gx/en/issues/economy/global-economy-watch/how-to-win-the-world-cup.jhtml
